UK glass reprocessors and recyclers claim the market price for recovered glass has fallen for the first time in over a year following the announcement of packaging recovery note figures for the 2Q 201…
UK glass reprocessors and recyclers claim the market price for recovered glass has fallen for the first time in over a year following the announcement of packaging recovery note figures for the 2Q 2010. The price for recovered glass has fallen a considerable amount for the first time in 18 months due to its link to a falling PRN value. However, trade association British Glass, while acknowledging a slight fall in prices paid for cullet, has warned against “dangerous speculation” and “scaremongering” over the amount by which the price could fall. The fall has been linked to a decline in the price for packaging recovery notes (PRNs) for glass. The price for glass PRNs has gone down over the past two months due to a surplus of glass PRNs being reported in the 2Q packaging figures published in July 2010. For glass, unlike other materials, the packaging recovery note (PRN) value acts as stabilizer for the price of the recovered material and underwrites a large proportion of its value. Therefore, the fall in PRN value is believed to have prompted the fall in the price for the recovered glass. At present, the fall is said to have only affected the green and mixed glass streams, which are traditionally lower quality and in greater quality. The price for these streams has fallen from GBP 19-23 per tonne for green in August 2010 to GBP 16-22 in September 2010, and from GBP 13-18 per tonne for mixed to GBP 13-16 over the same period. However, reprocessors have warned that clear and brown glass are also “almost definitely going to be affected”, with one recycler claiming a GBP 5 per tonne price drop was “on the cards”. Although, another glass recycler refuted this claim, stating: “There is always demand for flint [clear] and amber [brown], they won“t be affected”. The price of recovered glass has remained relatively stable since April 2009, when the price paid for all grades – flint, amber, green and mixed – fell by an average of GBP 3 per tonne in a month. This latest decline would therefore mark the first considerable change in the marketplace for 18 months. In an interview with letsrecycle.com in the week ending 25 September 2010, one reprocessor, who wished to remain anonymous, said the drop was caused by the “record high” number of glass PRNs placed on the market. “It is always that we could do a bit of a lower price but the 2Q figures were quite high in terms of seeing a strong PRN price combined with the fact that there were lots of PRNs about”. The increased abundance of glass PRNs, which rose by 76,000 tonnes to 430,000 tonnes between 1Q and 2Q of 2010 due to contributing factors such as the summer and the World Cup, means that the value of glass PRNs has fallen from GBP 17-19 per tonne to between GBP 12-14 per tonne. A spokesman for one glass recycler said: “If the PRN continues to fall, which I think it will, and goes to say, GBP 1 or GBP 2 per tonne, then we will see glass being taken FOC [free-of-charge] or at gate fee price on green and mixed”. Another reprocessor said that glass is unique compared to other material streams, where the fall in PRN value usually coincides with a rise in material value, as reprocessors in other material streams seek to keep prices broadly consistent. He said: “I can only think that the other material streams move the price [to remain consistent] while we cannot afford that luxury because the PRN is a much higher percentage of the value”. Despite the decline in prices, British Glass has warned that speculation as to the long-term impact of the packaging recovery note figures is dangerous. A spokesman said: “Obviously we have seen the same figures as everyone else and there is confusion as to what drivers there are behind it and there is a lot of speculation to what the real reason is. It is very difficult and dangerous to speculate about the potential for that to be a continued trend”. “I think going forward it would be silly and scare-mongering to say that this is an ongoing problem. We are aware that there has been change and this is where we are but we can“t really speculate and we don“t want to cause problems. It is too early to tell”. An industry expert added: “In the wider context, the fall in the glass PRN could actually benefit the wider market, as it has been felt that the glass PRN price has been artificially high for some time and this is something of a correction”.