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FOEX Indexes Ltd is an independent company providing audited, trade-mark registered pulp, paper, recovered paper and wood based biomass price indices.

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Aug 1, 2017

Market Comments

PIX Bioenergy - Pellet Continental

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Pellet Continental Europe – According to DEPV, the pellet production in Germany in Q2/2017 was 534 000 tons, which brought the first half year production to 1 072 000 tons. This year, both Q1 and Q2 production of pellets was much higher than during 2016, with the first half year pellet production over 20% higher than in H1/2016. The pellet inventories at producers in Germany are reported to be quite high.

As usual, the summer is not the busiest time for heating pellets. However, compared to a year ago, the price level has stayed higher this year. Also, the demand is reported to be quite good as the distributors have started preparing for the winter.

While the heating pellet market for household and intermediate use is experiencing the typical seasonal slowdown, the industrial pellet market in western Europe is relatively tight, as reported by Hawkins Wright Forest Energy Monitor. The negotiations for the coming heating season are already on the way and the buyers are interested in long-term contracts as the growth in Asian markets might influence the North American supply and export trends in the future. Korean and Japanese pellet imports are on a rise and when comparing the January-April period, the 2017 increase in shipments to these markets was over 50% y-o-y, totaling over 800 thousand tons. The main supplier was Vietnam with an over 50% share, followed by Canada (23%) and Malaysia (13%). All other suppliers, including the US, had still only quite small shares.

After declining since March, the July PIX Pellet Continental index for the medium-scale use showed a very small increase of 8 cents, or 0.04%, and landed at 201.44 EUR/ton. This is still down by 0.7% from the beginning of this year but up by 3.5%, year-over-year.