N.A. Pellet Producers Boost Exports to Europe
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Pellet exports from the two primary pellet-producing regions on the North American continent, the U.S. South and British Columbia, continued to increase in the 3Q/12 and reached a new record of 860,000 tons, according to North American Wood Fiber Review (NAWFR), Seattle, Wash., USA, which compiles and publishes pellet trade based on customs data and surveys of pellet exporters each quarter. Shipments in the 3Q/12 were more than 70% higher than the same quarter in 2011. Pellet exports from the U.S. South have skyrocketed the past two years with a quadrupling to 485,000 tons from the 3Q/10 to 3Q/12. Canadian exports also have gone up the past few years, but at a slower pace.
Beyond the trade statistics tracking the rise of pellet export volumes, another spate of export pellet plant announcements detailed in the NAWFR emphasized the quickly growing trade relations that are being established between European power utilities and U.S. pellet producers. The most striking announcement came in mid-December when Drax, a U.K. power company, stated its intention to build two 450,000-ton pellet plants, one in the state of Louisiana and one in Mississippi. Most other export-oriented pellet plants, while invested in by European utilities, are separate U.S.-based entities, with supply agreements and MOU's defining the business relationship.
The three major European pellet import countries remain the U.K., the Netherlands, and Belgium, while Italy, Denmark, and Sweden are notably involved in pellet imports from North America, but on a much smaller scale. Denmark's Dong Energy utility, however, announced its intentions to switch to woody biomass at three of its coal plants, an action likely to add demand from the U.S. Southeast.
Announced U.S. South pellet export plants increased sharply in the second half of 2012. Export pellet facilities under construction, conversion, or redesigned will add an additional 1.7 million tons of capacity during 2013, as reported by the NAWFR. In addition to these plants that are already under construction, five additional plants have been announced, and if they are actually built on the disclosed sites, they would bring another 2.3 million tons of capacity into play by the end of 2014.
More information is available online.
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