SITUATION OF PELLET AND WOOD MARKET JULY 2018

Dear Customer,,

we want to bring to your attention the important structural changes that are quickly occurring on the wood market through our analysis.

Market situation:

The great wood industry, after years of crisis, has resumed significant work all over the world and the quantities of wood required have now become important. Their raw material warehouses are now at historic lows and the raw materials arrive by ship.

Many groups from the emerging countries of Southeast Asia, with large financial resources, come to Europe to buy material both in the form of finished products and raw materials such as logs and are inclined to pay higher prices than ours.

Countries close to us like Croatia have already built 4 new biomass power plants to produce electricity and district heating (another 14 are planned by 2030) In Bosnia another 2 have been prepared.

The countries supplying timber, especially from Eastern Europe, are increasing domestic consumption of biomass (wood, pellets, wood chips) also thanks to decarbonisation policies, thus slowing down exports and reversing trade flows.

For some months now, the policies of individual timber holders have been changing:

Since the raw material is the same trunk for many types of processing, in order to have a higher GDP and improve its balance of payments, (thus creating a better situation in the eyes of Brussels and the IMF International World Fund) the various governments are “directing “the timber to their customers following the order of those who create greater added value on the finished product.

They are then supplied in the order: panel and paper industry, sawmills, pellet and charcoal producers and lastly, with what is left over, wood producers.

Energy Policies:

Countries such as England, Holland, Belgium and Denmark have already begun the construction of plants for the production of electricity (cofiring) using industrial type pellets whose international reference price for the port of Rotterdam has grown in the last year of 38 %, inevitably influencing the price of domestic pellets.

This is accompanied by export restrictions policies such as a dreaded tax on wood and pellets in Bosnia and the total blockade of wood from Ukraine starting from 1/1/2019 with an inevitable domino effect on all European markets.

On June 14, Parliament, the Council and the European Commission reached a binding agreement for all EU countries which provides for raising the target on the contribution of renewables to 32% to cover final energy consumption by 2030.

(the old target was Kyoto 20/20/20 and the biomasses had contributed for 2/3 followed by Photovoltaic and Wind).

Consequences:

As you can imagine, all this is causing a substantial increase in raw materials and their derivatives. The producers of Eastern Europe, above all of wood, have little material available to be transformed and to this is added the continuous loss of manpower that migrates to central-northern Europe attracted by higher wages and better living conditions.

Given the enormous demand and interest, the producers who still manage to work are no longer willing to produce for example the 25 cm intended for our stoves / spolert but only larger sizes given that above all the families on the Austrian, German, and Dutch markets Danish are equipped with larger-sized fireplaces or stoves at home and are willing to pay higher prices.

How to deal with these new market changes:

  • As always we suggest making purchases especially in the spring period, taking advantage of the low seasonality of the products;
  • re-educate ourselves to re-evaluate the use of wood essences that over time we have considered minor like linden, chestnut, oak, birch, ash, Turkey oak, maple, acacia, alder, fir.
  • Use the fiscal incentives of the thermal account 2.0 http://www.energiadallegno.it/incentivi/#conto ( the credit is paid by the GSE on the c / c staff in 2-3 months and not 10 years as other incentives) in order to buy new domestic systems (stoves and fireplaces) much more efficient and capacious, reducing waste and emissions;
  • Use well-seasoned or dried certified wood in ad hoc kilns (1 kg of 50% wet beech wood has 1930kcal, 1 kg of dried wood at 15% has 3790 kcal) to reduce emissions and have maximum efficiency quality in your car?)
  • Why choose Biomass Plus certified firewood? https://www.youtube.com/watch?v=JKBygQU1erU
  • Use certified pellets, not only the white ENPlus in class A1 (often driven by a fashion or eye-catcher, white = clean / beautiful or of little knowledge) but also that in class A2 equally valid.
  • Entrust us to qualified and certified technicians for the annual maintenance of our products. systems including the chimney;
  • Start a system of good practices such as knowing how to light the fire well. http://www.energiadallegno.it/come-accendere-il-fuoco-video-pillola-luca-mercalli/

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