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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.

Jan 15, 2019

Market Comments

PIX Bioenergy - Pellet Nordic

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Pellet Market – The European industrial pellet spot market has continued to be tight and January and February are not expected to bring any relief to the situation, according to Hawkins Wright Forest Energy Monitor. The spot deals made are from Russian and Baltic origins and neither Portuguese nor North American spot offers are available.

According to the FutureMetrics report the global pellet trade went up by 26% in 2018 and was estimated at 23.8 Mt. The growth comes mostly from increases in the UK, Denmark, South Korea and Japan. The report states that it is possible that the Netherlands will increase their pellet use in 2019 and 2020 along with a new subsidy scheme and become again a major market for industrial pellets. Japanese pellet imports are expected to double from the 2017 level to over 1 Mt in 2018, with Canada and Vietnam the main exporters to Japan.

The weather in the Nordic countries during December was mostly milder than average. In December, the Euro weakened minimally against the Swedish Crown as the monthly average exchange rate went down by 0.1%. This means a very small upward push for the euro value, and the opposite for the crown value. After removing the highest and lowest 10% of the price data, the PIX Pellet Nordic index value in Euro terms showed a decrease of 58 cents, or of 1.95%, with the benchmark closing at 29.18 EUR/MWh. The index value in SEK went downwards by 6.41 SEK, or by 2.09%, ending at 299.87 SEK/MWh. Even though lower than the previous month, these values are still over 8% and 12% higher than a year ago, respectively.