This report examines the issue of price fluctuation risk for Secondary Raw Materials (SRMs) and its impact on the UK recycling supply chain.
Prepared for Resources & Waste UK, it reflects concerns regarding a general downward trend in SRM prices from the highs of 2011/12, a squeeze on contract margins for waste management companies, significant budget cuts for local authorities, and challenging operating conditions for some parts of the UK reprocessing sector.
It proposes measures to help reduce the problems posed by volatile prices, including:
- Better sharing of risk between councils and waste collection/sorting companies
- The development of guidance and/or model contract clauses to promote good practice in risk sharing
- Reforms to the Packaging Recovery Note (PRN) system to give it more of an anti-cyclical impact
- Investigating the development of an investment fund to help smooth the impact of future SRM price risk for local authorities.
