As the compliance year draws to a close we take a brief look at final supply information to be released this year via the Q3 supply report.
Supply levels good across all material bar glass
It has been a relatively straight forward year with reported volumes at good levels across all materials. The latest supply figures show that barring a complete collapse of Glass supply, targets should be met with relative ease and we should head into 2017 with a considerable amount of carry in tonnage. After the pressures seen in last year’s market this has provided some relief. It should be pointed out that but for the undersupply positions towards the end of 2015 and its effect on Q4 2015 pricing things could have been very different.
As with all markets, supply and prices will ultimately move up and down. What we have seen this year is the net effect of a strong finish to the 2015 compliance year providing the incentive for strong supply to be created this year. With that in mind buyers and sellers would be cautious to consider what effect the reverse situation will provide in 2017.
Scheme membership reduces exposure to market fluctuation
With most companies opting for scheme membership as a means of complying with the legalisation they will always be protected from market price movements via the structured purchasing strategies which are employed. Those who leave themselves open to the exposure of market movements would be wise to keep a closer eye on PRN prices come 2017.
All materials reported a healthy supply with the Glass Aggregate the only material causing slight concern. Given the dynamics of the glass market and the ability for buyers to secure Remelt tonnage for aggregate obligations this should cause minimal concern due to the strong carry in volume at the start of the year and the increased performance of the Glass Remelt supply.
Strong figures welcomed but cautious note for 2017
Paper, Wood and EFW volumes have all reported strong figures, a welcome sight for those buyers who had to pay very high prices in Q4 2015. Both of the metal grades, Aluminium and Steel, reported strong volumes although there was some surprise that Steel export volumes had contracted on the previous quarter given the weakness of the £ however an increase in domestic reprocessing would seem to point towards a shift in the direction of the material. Plastic has maintained a strong supply this quarter although again many believed the state of the currency levels we would have seen an increase in exports. Although Plastic has had a very strong year it should be pointed out that this will need to be maintained as further target increases are on the horizon for 2017.