Australasia's home for timber news and information

Pellet shipments from US and Canada to Europe have gone in opposite directions

Total shipments of wood pellets from North America to Europe plateaued in 2014 after almost four years of continuous increases. Source: FORDAQ.

During the first two quarters of 2014, exports from Canada and the US were just over 1.3 million tonnes in each of the two quarters.

This was down from the all-time-high of almost 1.4 million tonnes in the 4Q/13, according to the latest issue of the North American Wood Fibre Review (NAWFR).

Pellet volumes shipped out of Canada to Europe have fallen by almost 25 per cent from the 4Q/13 to the 2Q/14, while volumes leaving the ports in the US South went up 10 per cent during the same time period. (Note: Due to irregularities with Customs data, NAWFR collects trade data from a number of sources including Canadian and US customs export data, European import data and from quarterly conversations with both pellet exporters and port contacts.)

Practically all wood pellets produced in British Columbia since the first major pellet plant was built over 15 years ago have been consumed by energy companies in Europe.

However, since late last year there has been a shift in direction for some of the pellets manufactured in the province; rather than being sent on the 16000 kilometre long journey to the UK or the Netherlands, they are being shipped to markets in Asia, a trip that’s only about half as far.

South Korea and Japan together imported about 100,000 tonnes of pellets from British Columbia in the 2Q/14, which accounted for 17 per cent of the total exports from the province that quarter, reported the NAWFR.

This can be compared to a quarterly average of only 30,000 tonnes during the period 2010-2012.

This shift to markets in Asia is likely to continue because demand for biomass is rising in this region.

The reduced shipments to Europe from Western Canada can be expected to benefit other supplying regions to Europe, including the US South, Eastern Canada and Northwestern Russia.

There are multiple factors which are likely to increase pellet shipments from the US South to Europe in the second half of 2014.

These factors include continued interest from governments in Europe in shifting from fossil fuels to renewable energy sources, the approaching winter, with its increased demands for fuel to heat homes, and the soaring tensions between Ukraine and Russia, which have implications for energy security for Europe.