Producer Obligation figures for 2011 show the potential for a tight plastics packaging recovery note (PRN) market, with an 11% increase in the tonnage obligation figure.
There are increases in obligation across the board, with plastic and wood seeing the largest increases of 11% and 10% respectively. Paper and glass have only seen small increases of 0.5% and 0.07% respectively and aluminium has increased by 3.9%. Steel’s obligation increases by 1.8% but it is thought this is a result of the increase in the packaging recycling target in 2011 to 71% from 69% in 2010.
PRN market specialist Environment Exchange explained in a statement: “A disappointing Q1 figure in plastic has stimulated volume trading in recent weeks and pushed the price back up above £5. The obligation figures confirm the much anticipated 10% growth in plastic demand and may lead to further rises in the PRN price as buyers and sellers react to the now established tighter market conditions. However, the increase in the obligation is the sole result of the increase in targets, rather than growth in packaging use or economic activity.
“In wood, although an increase on last year’s obligation of 10% was reported, the market is particularly oversupplied and is unlikely to see any direct effect.
“It was anticipated that glass may have seen some increase, but in fact remained almost unchanged.”
PRN trading platform Scrap-Ex director of materials Gareth Goodall said: “The obligation figures are pretty neutral for most PRN classes other than plastic.It looks like the economy bottomed out in 2009/2010. So we should see a broader demand for PRNs this year compared to last.The plastic is the interesting figure and suggests that the market looks pretty tight right now. We saw some big volume buying pre the figures so it looked like some people wanted to cover themselves. Along with the increase in volumes, Scrap-ex have seen traded prices move up from £2 at the start of this year to £5-plus. Certainly, the pressure on plastic PRNs is coming from the buy side right now, which is a huge change to 12 months ago.”
|Material||2011 Target (%)||2011 Obligation* (tonnes)||2010 Target (%)||2010 Obligation (tonnes)||Difference (%)|
*Figures taken from National Packaging Waste Database grand total of data split between compliance schemes.