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Trading in PRNs picks up

Trading in Packaging Recovery Notes (PRNs) is reported to have picked up in November following a quieter October.

But the Environment Exchange has cautioned that buyers are not rushing into the market because they expect the balance of supply and demand in 2012 to continue to be largely flat.

Environment Exchange traded a total of 107,716 tonnes during November, with 21,950 tonnes traded through the spot market and 85,766 tonnes through the forward markets. The total for October was 60,071 tonnes.

Senior market operator Ian Andrews told MRW that the November totals for the previous two years were both higher than this year – 125,000 tonnes in 2010 and 210,000 tonnes in 2009.

Andrews said sellers were continuing to lose out because of the low value of PRNs on most materials, with supply out-stripping demand by up to 10%, and warned that Defra was maintaining a “one-sided strategy”.

“Because they [Defra and the Environment Agency] are looking after the buyers, they need to incentivise the sellers,” he said.

“There is not a lot of panic because the buyers’ mentality is so easy-going. Buyers are not rushing into the market - the presumption is that 2012 will largely be flat.” He added that only PRNs for plastic and glass appeared to be holding up.

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