The wood pellet market as a whole is composed of users who consume the pellets and those who produce the pellets. For the market to work efficiently there needs to be a balanced relationship between the volumes of production and consumption. With any relatively new growing market, establishing this correlation can cause problems, and potentially damage market reputation.
The Recession and Wood Pellet Prices
An example of unstable prices appeared recently in the US. As the housing market slowed down due to the recession, housing construction and renovation decreased. Therefore less wood was purchased and less timber was processed, resulting in less softwood and hardwood by products. As the premium wood pellet market depends on these by-products to produce their pellets, pellet production also decreased. With a decrease of supply and an increase in demand in pellet stoves due to high oil prices, the pellet price would only go up, leading to pellet prices at $300 per 1000KG. The lack of supply of pellets and high prices frustrated many new pellet stove customers, as they purchased the stove as cheaper alternative to oil or gas. And due to the high prices of pellets the benefits we reduced. Unstable prices can severely damage market reputation, and steps should be taken to address these issues.
There are several factors, which affect wood pellet prices:
1. Raw Material Supply and Availability
2. Wood Pellet Demand and Supply
3. Wood Pellet Transportation Costs
4. Wood Pellet Market Competition
5. Wood Pellet Burner Capabilities
Over the next few days I will write articles discussing the above factors and how lessons can be learnt to keep pellet prices stable and ensure sufficient pellet supply.
The PelHeat Mobile Pelletizer can process resources including wood into fuel pellets. If you would be interested in registering your interest in the PelHeat Mobile Pelletizer and receiving updates on our progress and informed when the pelletizer is on sale please send us an email to:
Contact @ PelHeat . Com
For more information please visit:
www.PelHeat.com
Thank you for your interest
