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Wood Pellet Update - Spring 18

pellet update
Wood Pellet Update - Spring 18


This has been an unprecedented winter for the wood pellet market in the UK. Both Local and International markets have been hit by the perfect storm of increased demand and significant supply constraints.
 
Historically, by April we would expect to see some producers reducing their ex-gate pricing and for this price relief to be passed onto customers quite quickly. This year will be entirely different – in fact during the last week of March we had some of our supply prices increase by a further 10%!
 
We expect what price relief there to be this summer to be small – in the range of £5-£10 per tonne – and late, we would expect this to happen toward the end of May at the earliest. We do however expect most retailers stock positions to have come back to normality by mid-April. This coming winter our supply prices should be fairly consistent to what we experienced this year. Given the impact of the exchange rate on the market, we won’t understand until much later in the year the effect on pricing. However, we would expect prices to be comparable with what we saw this winter.

 

Firepower Pellets Bulk Discount


We've received tonnes of Firepower stock into our warehouse last week, and so we've removed the quantity cap on ALL our pellets, and introduced a £5/pallet saving on any order of 4 or more pallets of Firepower.
 
Firepower pellets still cost just £285 per pallet, and now includes an extra bag - 65 bags a pallet (975kg), saving you nearly £5/tonne.
Posted: 10/04/2018 11:22:28 by Stuart Woodward | with 0 comments

Firepower Bulk Discount

firepower stock
Firepower Bulk Discount

 
We've received tonnes of Firepower stock into our warehouse last week, and so we've removed the quantity cap on ALL our pellets, and introduced a £5/pallet saving on any order of 4 or more pallets of Firepower.
 
Firepower pellets still cost just £285 per pallet, and now includes an extra bag - 65 bags a pallet (975kg), saving you nearly £5/tonne.
Posted: 09/04/2018 10:12:44 by Stuart Woodward | with 0 comments

Brand New ecoBlaze Natural Firelighters

Brand New ecoBlaze Natural Firelighters


Brand New ecoBlaze Natural Firelighters are a clean and convenient way of starting your real fire. When used in conjunction with the ecoBlaze Chunky Kindling, they really are the best way to get your fire blazing quickly. The ecoBlaze Natural Firelighters can't be beaten with the following features and benefits.
 
• Natural, clean, convenient and odourless
• Quick to ignite and burn fiercely for approximately 8 minutes
• UK produced from FSC approved shredded spruce which is dipped in wax
• Minimum of 50 per box
• Suitable for stoves, open fires, wood burning ovens, BBQs and chimeneas
 
If you've enjoyed these firelighters we have other fantastic fireplace products that you shouldn't miss out on. 

Posted: 31/01/2018 15:53:48 by Stuart Woodward | with 0 comments

Wood Pellet Shortage - Update 12 January

Wood Pellet Shortage - Update 12th January


We are still seeing large scale shortages across the market with most bagged suppliers providing 50% or less of their typical winter volumes.

The European fibre situation is still in a critical stage - The Latvian Government has recently declared a disaster in the forestry sector due to flooding. This means that producers in Latvia have been able to trigger the Force Majeure provisions in their supply contracts to avoid non-supply penalties. The Latvians are not the only producers who have been struggling with the conditions - indeed most of the Eastern European producers from Russia across the Baltics and Ukraine and Belarus have suffered from similar challenges. Fortunately the weather has turned in the last week, allowing most logging operations to recommence, however there is a significant delay from the time timber is felled until a pellet can be delivered to a consumer. We don't believe the production challenges will abate until at least the middle of February, by which time the pent-up demand in the market is likely to keep supply tight and prices high well into the start of April.

Despite the market challenges, White Horse Energy is bringing substantial quantities of product to the market (at present our weekly volumes are 30%-50% up on last year). Unfortunately to deliver these volumes our costs have shot up dramatically (by 30%-40%/tonne). At present we have managed to limit the impact on the consumer to an increase of just 16% over prior years. Our ambition is to secure as much supply as possible for our customers in order to ensure that everyone who needs pellets can get pellets. As soon as we are able, we will reduce our pricing in line with our supply costs. While it is very difficult to determine exactly when this will happen, we'd like to think we would see price reductions from the end of February.

Our long-term view remains that next winter we will see pellet prices somewhere below this winter's pricing, but above previous winters. Despite what has contributed to a perfect storm for the pellet market this year, wood pellets remain a very stable priced energy commodity relative to the alternatives - Electricity, Gas and Oil regularly see price swings far in excess of what the pellet market has seen this year. 
Posted: 16/01/2018 08:40:28 by Stuart Woodward | with 0 comments

​Wood Pellet Shortage?

Wood Pellet Shortage?

 

Why

If you’re shopping for wood pellets right now you’ve probably noticed that the majority of retailers either don’t have stock, or have dramatically increased their prices. Fundamentally, what we’re looking at is a European wide shortage of wood fibre (the raw materials pellets are made from) that has severely restricted supply and massively increased the cost of pellets at point of manufacture. For the short term we expect availability to remain patchy throughout December with supply normalising to some extent in January, but for prices to remain where they are (or in some cases increase further) until at least April.
 

The Situation in Europe
For the last few years the European pellet market has been in a position of oversupply. An abundance of the wood fibre used to manufacture pellets combined with a number of mild winters contributed to create a buyers’ market where pellets were readily available and prices were at historic lows.
This winter, a number of biomass fuelled power stations in Europe have come on line. These have created significant demand for the same raw material. Additionally, much of Europe has had an unseasonably warm and wet Autumn – this has led to timber operations in many European forests being halted. They rely on frozen ground providing access to their heavy machinery into the forests – when the ground is wet and unfrozen, they either can’t gain access because their kit gets stuck, or their operations are significantly hampered.
So, we’ve got significantly higher demand (from both the traditional wood pellet market and biomass power industry), and significantly lower supply of raw material. In some cases, we’ve seen raw material costs increase by as much as 90%, in others the raw material just isn’t available, regardless of what one is willing to pay.
Due to this materials shortage, the majority of pellet producers are running at reduced capacities. Quite a lot have simply ceased production until the raw materials are available again.
Finished pellet prices are now around 30% - 20% higher now than they were last year.
 
The Impact in the UK
The UK is currently a net importer of wood pellets (i.e. we import more than we export.) Hence any prices changes in Europe are quickly reflected in the local market - UK producers who have been forced to sell at a loss in recent years to compete with imports are suddenly able to charge a ‘sensible’ price to their retailers.
Last week these supply side pressures were further exacerbated by strong winds on the East coast of England which meant that a number of container ships with significant stock on them were unable to dock until nearly a week after they were due.
White Horse Energy prides ourselves on holding sufficient buffer stock to deal with these eventualities. Unfortunately, it seems a number of our competitors don’t – hence when customers weren’t able to buy pellets from their normal retailer, they bought from us instead. Great news for us, but unfortunately our stock holdings weren’t able to deal with volumes in excess of double our projections, combined with a delay in inbound stock.
We are still seeing much stronger sales of pellets than anticipated for the time of year. As a result, all of our pellets are currently being sold with a future dispatch date (See the wood pellet page for up to date details). These are updated constantly and are visible on the website by product. We will never sell a pallet of pellets that we don’t have, so while there may be a delay in dispatch compared to our normal service, you can be confident that if we have sold you pellets, these will be with you in line with the delivery date estimate on your invoice – typically sooner.


The Impact for White Horse Energy Customers

We expect UK supply of pellets to be somewhat patchy throughout the remainder of December (and hence place some pressure on our availability). However, we are confident that come January things will have settled somewhat. We are open and will be taking and dispatching orders throughout the Christmas break.
 
In terms of pricing we anticipate prices staying the same, or if they do increase, increasing only marginally from current levels from now until the end of March.
 
Retail prices are currently up 10-15% on a year ago. Given that wholesale prices have increased 20-30% and raw material prices have increased by up to 90% I think the market as a whole has done a very good job at finding additional efficiencies and absorbing costs in order to limit the price increase being passed on to consumers.

Stay Up to Date

Want to keep up to date with all Wood Pellet activity? Either follow us on our social media platforms or register your email address on our Wood Pellet Stock Tracker for emailed updates  

 
Posted: 11/12/2017 10:18:18 by Stuart Fitzgerald | with 0 comments