Compliance schemes have been cheered by the amount of plastic packaging recycled in the final quarter of 2017, but are concerned that China’s import restrictions will depress the market in the long term.
Verified packaging recovery figures published on the Environment Agency’s National Packaging Waste Database confirm that most materials have met annual targets.
Comply Direct said that plastic was ”slightly more positive than expected in the current climate of exporting issues”.
Chris Taylor, Clarity Environmental commercial manager, said: “Once again, the performance of plastic recycling was of particular concern for this period as a result of the Chinese import restrictions, and plastic packaging recovery note (PRN) prices have risen sharply through the year as a result.
“Although the Q4 figures were down a little from a surprisingly good performance in the previous quarter, plastic production has remained positive.”
Paper PRN prices were also “far higher” than the previous year, said Taylor.
“Despite fears that it would fall short earlier in year, and PRN prices sitting far higher than this time in 2017, the [paper] grade saw a rise in Q4 and ended up with strong production, exceeding its obligation without carry forward.
“Wood has also significantly exceeded its obligation for 2017 and the grade continues to trade in good volumes, but the data suggests that wood could face difficulties in the year ahead. With its target set to almost double, prices have been increasing this year in anticipation of more challenging times.”
Tom Rickerby, head of business development at PRN trader t2e, said Q4 plastic PRN prices had “yo-yoed” between a high of £50 and a low of £15. He added that the Chinese import ban was creating “significant long-term uncertainty” for UK recyclers.
He said: “Target increases across all materials will provide additional risk in 2018, prompting strong demand for transitional and forward PRNs during the period.”
T2e also questioned whether “inexplicable” price rises in aluminium PRNs was down to shady market practices.
The aluminium sector did not issue PRNs on more than 8,500 tonnes of material, around 10% of annual production. T2e managing director Angus Macpherson said this made no sense because there was “plenty of demand” for aluminium PRNs.
He added: “In the absence of logic, questions should be asked whether those withholding tonnage were acting the best interests of the market or their own self-interest and, if it is the latter, whether that should be identified as market abuse.”