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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.

Sep 18, 2018

Market Comments

PIX Bioenergy - Pellet Nordic

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Pellet Market – In August, the spot trade of industrial pellets in Europe picked up momentum, according to the Hawkins Wright Forest Energy Monitor. However, no urgent need for pellets is yet seen, and the US producers seem to still have a limited amount of spot volumes available. Meanwhile, Russian producers are expected to be benefiting from the low Ruble value. The heating market in Europe is expected to get more vibrant with the upcoming heating season.

Pellco Brazil is planning to build a pellet mill and, alongside it, a biomass-fired CHP plant in southern Brazil. The feedstock would come from plantations close-by which were never utilized for pulp production, despite this having been planned. Multiple smaller pellet plant projects are also on the way in e.g. Russia, Vietnam and the United States.

According to a report by the USDA FAS Global Agriculture Information Network, the Russian pellet industry is predicted to keep growing in the future. Russia is ranked the 8th among the global pellet producers (covering 3% of the global production) while accounting for 6% of the global pellet exports.

In August, the temperatures in the Nordic countries were higher than average, but when getting closer to the start of the heating season, the end of the month saw more regular weather. The Euro strengthened considerably against the Swedish Crown in August, and the monthly average exchange rate went up by 1.5%. This means an upward push for the SEK value, and the opposite for the Euro value. The PIX Pellet Nordic index value in Euro terms showed a modest increase of 15 cents, or of 0.56%, and closed at 27.03 EUR/MWh. The index value in SEK went upwards more, by 5.85 SEK, or by 2.11%, to 282.92 SEK/MWh.