Friday, September 30, 2022

Wood pellet prices at record high – trend reversal in sight

The pellet market in Germany continues to be influenced by many factors, caused by the effects of the war in Ukraine. These include a sharp increase in demand, the increase in the cost of production and logistics, and high raw material costs due to a downturn in the construction industry.

In September, the national average price for wood pellets reached €763.76/t if 6 t were purchased. That is 11.8% more than in the previous month and 322.7% more than in September 2021. Converted to the heat supply, this corresponds to 15.28 ct/kWh. Despite this further increase, experts speak of a trend reversal that is already emerging.

“We assume that the situation will slowly ease again, also because the warehouses of existing customers are already full. The first signs of this are the falling demand, which has almost reached normal levels in the last few days,” explains Martin Bentele, Managing Director of the German Pellet Institute (DEPI). In addition, this development is also confirmed by various dealers who are again offering pellets well below the average price determined for September.

However, it is still advisable to only order pellets if you actually need them. More precise forecasts cannot be made seriously due to the large number of causes and the extraordinary situation, notes industry insider Bentele.

Reasons for high pellet prices and longer delivery times:

• Very high demand from existing customers

• Many new customers who have replaced their fossil heating

• Increased raw material prices and high energy costs in production and logistics

DEPI has prepared background information on the pellet market online.

regional prices

There are the following regional differences in the price of pellets in September 2022 (sales of 6 t): In southern Germany, the price for pellets is an average of €741.26/t, in the central region it is €771.79/t. In northern and eastern Germany, the pellet price is €794.00/t.

Larger quantities (26 t) will be traded in September 2022 at the following conditions: South: 731.50 €/t, Central: 750.89 €/t, North/East: 765.73 €/t (all incl. VAT) .

DEPI-Pelletpreis

The DEPI pellet price has been published monthly since 2011, until September 2020 by the German Energy Wood and Pellet Association (DEPV). It describes the average price in Germany for a tonne of ENplus A1 quality class pellets for the respective purchase quantity (delivery within a 50 km radius, including all ancillary costs and VAT) – throughout Germany and in three regions. A DEPV pellet price for delivery contracts (net) can be called up at DEPV.

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