The price of PRNs will fluctuate through the year due to supply and demand which is explained beneath the table.
The table below gives prices for the previous year, the previous quarters in the current year and the current price. The prices are a range drawn from a number of sources but should represent a fair range in each case. There will always be variations due to the scale of volume a scheme has to buy, when they buy and whether they buy on the spot market or through established relationships.
The graph below gives an indication of average prices over the years.
PRN and PERN (exports PRNs) prices relate to the supply and demand for evidence. Supply is created by the amount of reprocessing or exporting carried out of packaging material that has become waste in the UK. Demand is created by the targets applied to the data reported by registered producers.
At the beginning of a compliance period (calendar year), the amount of PRNs and PERNs that will be available can only be guessed from the previous year’s activity. The first real indication of the likely supply volumes will come when Quarter 4 data from the previous year is published, normally at the end of March. This will also include any evidence carried forward from December in the previous year, so it will show whether the year is starting with a reasonable volume from the carry over. Data is then released for each quarter in the year by the Agency by the end of a month following a quarter, showing the amount reprocessed or exported. This then gives a running commentary on the state of the supply side. If supply looks weak compared to demand, then prices will rise. If it looks as though there will be a surplus, then prices will fall. The rate and scale of the riseand fall will be directly proportionate to the perception of the likely scale of shortfall or surplus.
The demand figure would normally be expected to increase year on year as more companies register with increased sales and the targets increase. However, because demand is based on data supplied by producers for their activity in the previous year, demand might not necessarily reflect the position in the year.
Compliance schemes have to act in accordance with their operational plans when it comes to buying PRNs. They therefore are expected to buy on a quarterly basis, but most will leave it until the end of each quarter to buy. However, most charge members quarterly in advance for their PRNs, so generally will charge more than current costs to build in some contingency for the unexpected, rebating (some of) the difference at the end of the year.
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