A leading glass reprocessor has warned of an impending crash in glass prices following news that glass packaging recovery notes (PRNs) fell to £14 this week.
Figures from PRN trading platform scrap-ex show that glass PRNs have gradually dropped from the normal value of £21- plus in Q1, £19-£20 in Q2 and now, in Q3, glass PRNs are trading around the £14-£15 range.
Recresco director Tim Gent told MRW that because of a surplus of glass PRNs in the market, the price has fallen because of the supply and demand principal. When the Environment Agency published Q2 PRN numbers, MRW reported that glass packaging tonnages seemed to have reached a record high of 472,917 tonnes, which was unusual for the time of the year. Gent believes glass PRNs dropped by a couple of pounds once these figures were published but seem to have continued to fall.
“It’s a massive drop because PRNs have now lost a quarter of their normal value and there doesn’t seem to be anything to stop it from going down further,” he said.
“The drop will lead to a collapse in glass prices. I think we will see this in green and mixed glass, which will mirror the PRN fall, while materials recycling facility glass will go through the floor.”
According to Gent, the collapse in glass prices could happen in the next few weeks, but he expects clear and amber glass to be immune to the PRN effect. “Aggregates and exporters will be hardest hit by the fall in glass prices and it will leave them looking at losses,” he said. “Some people stock PRNs to push the price up and they will have lost out too.”
However, scrap-ex director of markets Gareth Goodall said: “The fall in glass PRN values has been a gradual weakening during the past month or so, with prices around this level since mid-August. It seems that prices are moving in line with PRN figures from the Q1 and Q2 results, so it reflects the supply and demand balance.”
PRN trading site The Environment Exchange account manager Patricia Hall commented: “To meet the UK’s glass obligation, the industry has to generate just over 800,000 PRNs during the next two quarters. Based on quarterly reprocessing rates so far this year, this target looks achievable. But at this stage we cannot speculate on how the market will move during the next few months and will have to wait for the Q3 supply figures to be released.”