2010 glass packaging recovery notes (PRNs) have shot up in value and are being traded at around £40-£49 a tonne from their lowest pre-Christmas figure of £2 per tonne in November.
Businesses are looking to buy up 2010 PRNs in order to meet their annual obligation. They have until 31 January to do this. With higher demand but a shortage of PRNs, the price has increased considerably.
Environment Exchange senior market operator Thomas Rickerby said: “Every year we see at least one PRN material surprise traders with high volatility. In 2010 it has been the turn of glass to rock the market. In a year of record low prices, hopefully this should shake some of the current complacency out of the market, and will serve as a reminder to buyers and sellers that it only takes one incident in any given material to swing market conditions and send the PRN price back up.
“The end-of-year volatility in glass has been compounded by an unforeseen tightening of the glass supply and the genuine risk of non-compliance at the end the month. In many ways it has been the perfect storm.”
The sudden spike in price has added value to 2011 PRNs, pushing them up from £10 to £15 a tonne.
PRN trading platform Scrap-Ex director of markets Gareth Goodall added: “What has been interesting is the way this price move in 2010 has pushed up the price on Scrap-Ex glass forward contracts. Glass trading forward for 2011 is now in the £12.50-£15 range, up from £10 at the start of the year. It will be very interesting to see how those contracts trade this week.”