Plastic packaging recovery note (PRN) prices have risen by 84% since the start of the year, fuelled by concerns over the impact of China’s new National Sword crackdown.
Prices increased from £25 to £40 in the month following the February announcement of the anti-smuggling operation, which is also targetting illegal and poor-quality waste imports.
Fewer shipments to China, due to more rigorous checks being carried out, has driven up prices and the market sentiment is that PRN generation will end up lower than expected.
Tom Rickerby, senior market operator at marketplace provider T2e which supplied the graph, says such fears are unfounded because of an anticipated record PRN generation this year.
He said: “Parallels have been drawn with the Green Fence initiative in 2013 which sent PRN prices to £75 per tonne.
”However the release of strong March monthly supply data has hinted at a potential record PRN generation in Q1, contrary to overwhelming market sentiment.”
Plastic PRN prices on t2e have risen 84% to £46 since the beginning of the year, but retracted to £40 following the release of the latest data.
“Plastic PRN prices have been rising steadily since China announced its National Sword initiative, [while] unprecedented freight rates and container shortages started playing havoc with the export market,” said Rickerby.
“It’s not unusual in plastic for the data to contradict market hyperbole, but this news will come as a shock to many sellers whose outlook remains as bullish as ever.”
Other PRN grades have not changed markedly in response to the Chinese crackdown.
- Read Rickerby’s report on the PRN market in the next issue of MRW