Packaging compliance scheme Valpak has secured enough packaging recovery notes to comply on behalf of its membership for 2008. It said it has also secured a substantial pool of carry over materials meaning its PRN stock is protected for the early part of 2009.
Perceived PRN shortages for steel in 2009, have already threatened to push up prices.
MRW reportedthat concerns that Defra will not reduce packaging targets have led to some steel PRNs being offered for £150 a tonne, up £90 from the top end range of £30 to £60 a tonne.
Commenting on the general materials market Valpak chief executive Steve Gough said: The first half of 2008 will be remembered for record high commodity prices supporting recycling, high fuel costs and ever increasing demand for raw materials in the world.
The second half was a very different story. The global financial crash saw demand fall, prices crash and companies really suffer in harsh economic conditions. The PRN system very quickly reacted to this situation and prices for the evidence rose sharply to support the trade of packaging materials collected for recycling. It is this subsidy which replaced the high commodity price and kept the system going.
PRN traders say that prices will be uncertain for at least the first quarter adding that this could still be the case in April. But Valpak said PRN prices were appearing to stabilise. It said it was prudent for schemes to ensure they had bought PRNs at prices which support the reprocessing sector without paying a premium which could damage scheme members bottom lines.
Gough said the schemes early action to secure PRNs had helped to stabilise and even reduce prices in some circumstances. But, he warned, the market was still unpredictable.