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Glass trading ‘tentative’ as uncertainty over target remains

Glass market insiders have reported difficult trading conditions resulting from the possibility that Defra will amend the business recycling target this year.

Defra consulted on the matter over Christmas after a study by WRAP and Valpak suggested the amount of glass put onto the UK market might have been overestimated.

Any changes to the target will be announced by the Treasury in the 2014 Budget, a Defra spokesperson told MRW.

Industry insiders told MRW the lack of a clear objective was severely affecting the market of glass Packaging Recovery Notes (PRNs) and consequently trading in the secondary material.

Myles Willingale, contracts manager at Day Group, described trading conditions as “very tentative”. He said buyers were not committing to to buying PRNs as they envisaged prices could fall sharply if the glass target was lowered.

“Understandably, why would they buy at his time of the year when in three or four months they could buy PRNs for an awful lot less?” he said.

Chris Taylor, PRN trader at Clarity Environmental, also said there was little trading through the open markets.

“Anything that is being bought or sold direct appears to be on a tonnage basis, without fixed prices being agreed,” he added.

Tim Gent, director at Recresco, told MRW that glass from MRFs had been affected in particular by the subdued trading conditions.

“When you have any issues around PRN prices, it is always the worst quality material that suffers most,” he said. “We are very nervous because we deal with such large amount of glass. If we get the prices wrong then it’s devastating.

“It is quite shocking that Defra put us in this position when we don’t know what the targets are.”

Willingale and Gent insisted the target should be implemented in 2015, rather than during this year.

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