December was a reasonable month across all recycling grades however, compared to November where every grade met its target, we would have hoped to see an equally strong month in December. Despite the satisfactory performance this month, questions around certain grades meeting their overall obligations remain.
Paper and board
Following a very strong November, paper and board had an even better month in December with 380,000T of PRNs generated, covering the monthly requirement for paper as well as monthly requirement for general (combined monthly required, 320,000T). Despite general recycling still lagging behind, the price of paper has remained steady over the past month.
Glass re-melt and Glass Other
Glass re-melt continues to perform well with 109,000T meaning it hit its monthly requirement. Meanwhile glass other had a weaker month (36,600T), falling short of its monthly requirement by almost 7,000T. The glass gap continues to close and leaves glass overall ahead of its target by 11,000T. Glass PRN prices have remained steady throughout the month.
Following consistent, on target months, December was a reasonably weak month for aluminium (9,800T), missing its monthly target by 1,800T. This leaves aluminium slightly behind its year to date requirement by 1,500T, this could indicate why the aluminium PRN price has continued to rise as the compliance year draws to a close.
Steel had a weak performance in December (25,000T), missing its monthly target by 4,500T. However, due to its exceedingly strong performance in November, steel remains comfortably over target by 9,400T. The price of a steel PRN has remained around the same throughout the month.
After plastic’s strong performance in November (119,000T), it was disappointing to see a reduction in the generating of plastic PRNs, with 92,400T produced in December. Plastic fell short of its monthly net requirement by around 3,000T, leaving this grade almost 21,000T behind its year to date requirement.
Contention remains over whether plastic will meet its UK recycling obligation, subsequently driving the plastic PRN price up. The price rose considerably towards the end of the compliance year, and forward markets indicate that it will continue to increase.
Whilst there was a drop off from November (51,000T) to December (42,300T), this remains a great performance overall and continues to help close the general recycling gap that we’ve seen throughout the year, with 244,500T over target. It does appear that we will need to see general recycling bought against other over-performing grades in order to meet the overall requirement.
Ed Ewence, Assistant Commercial Director, Clarity Environmental commented:
“December has been a reasonable month for UK recycling, with most grades very close to their target or sitting comfortably ahead. However, for some grades, particularly plastic and general recycling, we could see a situation where the overall obligation is not met.
Due to the time in the year, we could still see volatility in the market going into 2023 and large market changes as it becomes clearer on whether the grades will fall short or surpass their overall requirements. At present, forward markets are still indicating that prices will remain high as with the latter part of the 2022 compliance year”
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