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German wood pellets have fallen in price in the first quarter of the year 2015

Mon-06-2015

Wood pellets germanyA constructive idea of using wood for heating purposes has blossomed into a successful development of wood pellet market in Germany. One of the most significant factors that predisposed wood pellet market to this conspicuous success was an increase in oil and gas prices. Hence, a recent fall in prices for oil undermined a favourable position of wood pellets initiative in Germany.

Despite a 5% rise in December, in February the average price for wood pellets has increased only by 1 euro per tonne, with a total decrease in prices by 31% in comparison with the previous month.

Moreover, lower winter temperatures in the last two years only contributed to making the current situation to some extent indistinct. People do not recognize as an immediate practical necessity to replace their old heating systems adjusted to fossil fuel in favour of more up-to-date ones, suitable for wood pellet heating while this considerable dip in prices for oil persists. Consequently, it led to a sluggish demand for wood pellets and eventually to spare capacity of the market. The current amount of production constitutes 2.2 m tonnes with an annual capacity of about 3.5m tonnes.

Prices for German wood pellets would regain ground

German Biofuel Portal biomassa.de carried out an extensive survey of the wood pellet market, which highlights an insignificant rise in wood pellet prices in the first quarter of the year 2015. According to the results of this survey, wood pellet price of 256 EUR/t, higher by 0.4% than in January 2015, but about 10% less than in February 2014. The current price advantage of wood pellets over fuel oil is +18.8%- in January, it stood at +3%.

In February 2015, the price of wood pellets in Germany varied in different regions: in Southern Germany, pellets cost constituted 255.28 EUR/t for 6 tons purchases. In Central Germany, the price was 255.91 EUR/t for the same quantity, while in the north, pellets were valued at 263.28 EUR/t.

Larger quantities (26 t) were traded in February 2015 at the following prices: North/East: 241.42 EUR/t, Center: 238.96 EUR/t, South: 241.95 EUR/t (all including VAT).

Therefore, if prices for oil preserve a tendency for slumping and do not stabilize, the situation at wood pellet market risks to remain precarious. Nevertheless, according to the estimations of analysts, in spite of all these factors, in any case, it is not yet time for wood pellets producers to wave a white flag or lose their nerve. The above mentioned market overview allows to count upon the rise in prices for wood pellets, which are expected to attain the level that featured the beginning of 2014.



Source: http://ukrfuel.com/news-german-wood-pellets-have-fallen-in-price-36.html

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