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Will we see steady prices again? Who knows...

By Richard Clews, Director


Having spent nearly 40 years in the waste and recycling business I have concluded that the longer I am in it the less I understand what is the hell is going on.


Cardboard

The export value for 25 tonne container loads of cardboard has fallen by 70% in last 12 months. The domestic mills who always paid less than the export market, have shadowed the falling rates and are now offering as little as £35.00 a tonne for 25 tonne loads delivered to their gate.

The UK cardboard production appears to have moved more to using mixed papers to produce cardboard and card rather than the coarser fibre in cardboard waste, the outlook is that Cardboard waste prices will remain subdued for some time.

We can therefore expect a shake-out in the collection of cardboard, particularly the small time collectors who specialise in commercial and industrial premises where free collections have been common place,  these collectors will be faced with a non-viable business model as the value of the cardboard will not cover their costs.  


Plastics

In the UK we have the fabulously arcane Packaging Recovery regulations that creates incentives to recycling through PRNs (Packaging Recovery Notes) which adds value to recyclables. One of the purposes of this system is to raise the selling price to stimulate recovery of that product.

Ignoring the fact that only those who have chosen to make it their specialised subject can understand the mechanism of PRN’s they have worked reasonably well but they can create huge imbalances. The most recent criticism has been that Export PRN’s does not require the burden of proof necessary for domestic PRNs and that his has lead to materials being exported to dubious final destinations.

During June 2019 the export PRN peaked to a previously unseen level that pushed clear polythene prices to £500+ per tonne for export loads, only for them to fall to £360.00 per tonne two weeks later.

Its great to get a surprise benefit of more money than you expect for a commodity but it is grim if you have been paying your customer’s on the basis of a high price and then the selling price for a 25 tonne load end up being less than you have paid your customers.

Similarly, when the prices are very high the lower, dirtier grades become viable e.g. construction film and silage wrap have a value, but if there is a sudden drop in price the buyers do not just demand a lower price, they disappear altogether and you can be left with a yard full of baled product that can only go to landfill at £100 a tonne cost!


With so much uncertainty in the markets due to Chinese restrictions and Brexit, the one thing we all need is a period of calm though I suspect that the waters ahead will be anything but a mill pond.  


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Unit 17, Hunters Lane, Rugby, CV21 1EA
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