The spike in plastic PRNs generated a lot of interest with members in June when a new record was set for plastic PRNs at £450/t. We believe that this was caused by one buyer who had a deadline to meet at the end of June and once they had completed their contract, prices fell back to £200/t.
At the end of July, quarterly statistics were released. The figures were generally good but Plastic and Aluminium tonnages accepted to be recycled / exported are behind the level needed to assure the market that there will not be any problems with compliance in the second half of the year.
In order to meet the current plastic targets, the UK needs to recycle between 265kt and 270kt/quarter. In Q1 we fell short of the target by 20kt – 25kt with less than 244kt being recycled. In Q2 we saw the highest figure recorded with almost 280kt. We thought this would be enough to stabilise the market but the aggregate still leaves us with just below half of the 2019 obligation recorded and the price has climbed from £300/t to £450/t at the beginning of August.
Our bold pricing in our Q3 invoice and prompt payment from the majority of our members has allowed us to buy / contract almost 80% of our annual obligation for plastic so we are in a good position for the rest of the year.
In order to meet the current aluminium targets, the UK needs to recycle between 27kt and 28kt/quarter. In Q1 we fell short of the target by 3kt – 4kt with less than 24kt being recycled. In Q2 we saw an improvement with just over 27kt which is OK for Q2 but leaves us with the Q1 deficit to address. The cost of aluminium PRNs has increased from below £200/t to over £300/t.
We have a much smaller obligation in aluminium than any other material so it is less of an issue for us and we have received over 80% of our annual obligation for aluminium so are in a good position for the rest of the year.