North American wood pellet exports reached new record in Q1

North American wood pellet exports reached a new record of over 1 million tons in the first quarter of 2013, according to the North American Wood Fiber Review. There has been a steady growth in shipments from both the U.S. and Canada the past few years, mainly as a result of the continued increase in demand for pellets in the United Kingdom.

Pellet exports from the two primary pellet-producing regions on the North American continent – the U.S. South and British Columbia – showed no signs of slowing in early 2013, with the rate of growth likely to accelerate in the second half of the year. In the U.S. South, pellet export volumes to Europe resumed their double-digit growth after a brief pause in the fourth quarter of 2012. Export volumes, based on information from industry sources as well as trade data in Europe and North America, showed exports in excess of 1.7 million tons in 2012, as reported in the North American Wood Fiber Review.

Canadian exports also rose in 2012 to 1.5 million tons, but this increase was less than that seen in the U.S. During the first quarter of 2013, total pellet exports from North America reached a new record of over one million tons for the quarter. This can be compared to the annual shipments of 750,000 tons just four years ago.

The United Kingdom continues to strengthen its claim as the primary destination for North American pellets with over two-thirds of the export volume from the U.S. and Canada going to the U.K. in the first quarter of 2013.

The story of Drax’s plans for its large power plant conversion from coal to biomass in Selby, England, continues to make news across North America.Earlier in the spring, Drax Biomass International Inc., a U.S.-based subsidiary to Drax Power, announced that it will develop, construct and manage two pellet plants, a port storage and a loading facility in the US South, which will be sending pellets to fuel the company’s U.K. facility. Also, in Eastern Canada, pellet producer Rentech announced an off-take agreement with Drax Biomass, which will result in new investment in ports to increase pellet-loading capacity, and in rail transportation, along with the construction and operation of two pellet facilities themselves.

The increase in pellet production in Western Canada has pushed sawdust prices upward the past few years, with 2013 prices being about 15 percent higher than they were in 2010, as reported in the NAWFR. In the US South, where smaller logs from thinnings and treetops are commonly used for pellet manufacturing, there has not yet been any region-wide upward price pressure as a result of the new wood-consuming sector in the region.

This news brief is from the market report North American Wood Fiber Review, which has tracked wood fiber markets in the US and Canada for over 20 years. It is the only publication that includes prices for sawlogs, pulpwood, wood chips and biomass in North America. The 36-page quarterly report includes wood market updates for 15 regions on the continent in addition to the latest export statistics for sawlogs, wood pellets and wood chips.

Wood Resources International LLC, an internationally recognized forest industry-consulting firm established in 1987, publishes two quarterly timber price reports and have subscribers in over 30 countries. The Wood Resource Quarterly, established in 1988, is a 52-page market report and includes sawlog prices, pulpwood and wood chip price and market commentary to developments in global timber, biomass and forest industry. The other report, the North America Wood Fiber Review, tracks prices of sawlogs, pulpwood, wood chips and biomass in most regions of Canada and the U.S.

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