In April, 2014 prices for industrial wood pellets on the European market continue to rise gradually, bouncing back to the normal indicators from the falls seen in February and early March.
The maximum increase in prices is expected in the 4th quarter of 2014. For example, it is planned to deliver 25 000 tons of pellets into Denmark at the price of $ 182/t. The experts claim that further deliveries in the region will remain in the range of $ 182/t – $ 185/t.
However, in general, the growth of prices is insignificant despite large volumes of pellets on the market. European traders remain satisfied with levels of wood pellets that they keep in storage for its further selling, when buyers will have an urgent demand for the biofuel.
In particular, it is expected an increase in the UK demand for the industrial wood pellets as a large British power plant under the name "Drax" – the first British power plant that works, using biofuel – plans to launch the second production line in May, which will require additional amounts of fuel.
The demand from South Korea remained at the same level, while the delivered prices increased from $ 195 /t to $ 200 /t. Thus, this year it is planned to deliver 200 000 tons of industrial wood pellets from British Columbia to South Korea.
In the Baltic region the wood pellet price in February was at the level of € 128/t, in March – € 125/t already. It is expected that the price will remain at the same level till the 4th quarter and then rise to slightly above € 127/t. According to the analysts of Ukrainian biofuel portal pellets-wood.com an increase in demand for wood pellets in the region should not be expected in the near future, as many buyers have already purchased necessary amount of biofuels for some period.
In Central Europe in the 1st quarter of 2014 it is also observed the decline in pellet prices. However, in this region this tendency will proceed and during the next period the wood granules cost is expected to reduce by € 5-10/t. In particular, the price of pellets in Austria in April is € 242.8/t compared to € 260/t in March. In Germany the cost of wood pellets is € 259 /t in comparison with € 276.8 /t of last month. In Switzerland the biofuel price is fixed at € 409.50/t in April compared to March prices at € 418/t.
It is seen that from the 2nd quarter of 2014 on the European market for industrial pellets is expected slight increase in prices. Wood pellets will reach the maximum cost only by the end of the year, thus significant increase in demand for biofuel should not be expected. However, in the countries of Central Europe wood pellet prices will keep falling.
Author: Ivan Prokhorov
