Recycling figures released by the Environment Agency illustrate that plastic continues to be a problematic material, falling behind the expected level for the first quarter of the year.
The table below shows estimated gross and net requirements for 2019. These are based on last year’s submissions, with 2019 government targets applied.
It also shows the carry over tonnage reported earlier in the month. Carry over is the number of PRNs produced in December 2018 that are issued for 2019 use. The data shows that the total amount of carry over PRNs has fallen in comparison to the previous year, particularly in paper, steel and plastic.
You will see from the table below that all materials are performing well, bar aluminium and more concerningly plastic.
2019 Q1 packaging figures (tonnes)
What does this mean for producers?
In a free market system there is always a risk of lack of supply and volatility across all materials and following the recent publication of the packaging recycling data for the first quarter of 2019, there are two immediate risks.
Aluminium - high risk
Aluminium has fallen slightly short of its quarterly requirements and we have already seen an increase in price of £40. We would expect this to continue to rise in the short term, especially with the increase in the recycling target also influencing the demand. We would expect that this material will remain volatile for the remainder of the year.
Plastic - high risk
The market remains extremely tight for plastic and the problems seen at the end of 2018 have continued into the 2019 compliance year. There are a couple of issues contributing to the number of PRN being produced.
Firstly, the number of accredited reprocessors/exporters has reduced compared to last year. Secondly, the export market for low grade plastics is becoming smaller as other countries impose restrictions on low grade plastics.
The good news is that more plastic is being processed in the UK and the high PRN prices are supporting the infrastructure that is allowing the UK to process more. We expect that plastic PRN prices will continue to rise for the foreseeable future.
Glass - medium risk
The market remains relatively stable for glass in the short term as glass other is performing really well, so there is less reliance on glass remelt to fulfil the overall glass recycling target. The higher PRN prices seen at the end of 2018 has attracted more glass into the system and we hope this will continue for 2019 to provide price stability.
Paper, Steel & Wood - low risk
Paper, steel and wood are performing well against the forecasted demand, this is particularly important to ensure that we have enough PRNs in the system not only to fulfil the material specific recycling targets but also to satisfy the overall general recycling target.
Looking ahead
Ecosurety will continue to communicate the changes in the PRN market throughout the year and the impact on producers. For the remainder of the year we would expect to see higher prices in aluminium and plastic. Paper, steel and wood are performing well and we hope this will continue and provide stability in the market for the rest of the year.
If you would like to speak to a member of the Ecosurety team about the impact of compliance on your business, please contact us on 0333 4330 370.
Find out more about how Ecosurety works hard to make a positive impact on UK recycling.
Sandeep Attwal
Group procurement manager
Sandeep works in the role of Group procurement manager. Sandeep builds and maintains strategic relationships with our key service partners for packaging, batteries and WEEE, whilst creating new relationships and initiatives to improve UK recycling. Sandeep has over 17 years’ experience of the regulations and understands the challenges and opportunities that can arise from volatile markets.
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