From the Director's Desk: December Data Rounds out 2022 Picture, is This the New Normal? Winter Extending his Stay?

December Data Rounds out 2022 Picture, is this the New Normal?

Last week the EIA published the December data of its Monthly Densified Biomass Fuel Report, rounding out the statistical picture of the 2022 calendar year. At 1.8 million tons in wood pellet sales, the year offered a rebound from a disappointing 2021 but fell short of the 2 million tons mark that has emerged as a nice round line of demarcation. From 2018-20 the industry inked three consecutive years with sales above 2 million tons, and now the industry has recorded its second consecutive year below 2 million. The PFI Heating Degree Day Index from December 31 found all pellet markets in the Northeast ahead of the previous year’s accumulated HDDs. While Portland, Maine, and Lebanon, New Hampshire were only marginally ahead of the prior year’s pace, other locales in the East like Buffalo, New York and Harrisburg, Pennsylvania were 20% of the prior year’s pace. Those numbers help to explain the recovery from last year’s dismal December sales but demand fell well short of the December high water sales mark of 216,915 tons in 2016. 

Sales Data (2021 Data in Parentheses) 
December Sales - 188,664 tons (144,315)
U.S. Total Sales - 1,815,592 tons (1,720,654)

Wood pellet production dipped to 141,466 tons, the lowest production output logged in the year since June, and represents the lightest December production since 2018. It is interesting to note that the industry carried far less inventory into the month, 112,000 tons compared to 163,000 in 2021, but this did not excite producers into greater output. Instead, producers allowed the month to deplete overall inventories by almost 30,000 tons leaving ending stocks for the year at 85,259 tons more in line with the December inventory positions of 2018-20. 

Production Data (2021 Data in Parentheses)
December Production - 141,466 tons (145,361)
U.S. Total Production - 1,741,388 tons (1,789,550) 

Year-End Inventory - 85,259 tons (185,800)

Winter Extending his Stay?

Last week winter threw a haymaker in the Northeast, letting go with a spring Nor’easter that crippled Logan airport for a day and locked motorists down all across the Northeast. The most recent PFI HDD Index showed modest improvement against last year’s accumulated HDDs, but most markets in the Northeast still lag behind last year’s HDDs. Unless lower than normal temps forecast for the next 10 days fully deliver, it seems unlikely that when we see March numbers around conference time this March will be enough to save a disappointing 2022-23 heating season. March sales tend to be highly variable as consumers are unlikely to make a final fuel purchase for the year unless the thermostat really bottoms out. In 2019 producers sold nearly 160,000 tons of wood pellets. Last March the industry limped just past 70,000 tons in sales. Here’s hoping the recent spate of inclement weather boosts consumer demand for heating pellets and a late-season “top-off” will drive sales.

Registration Open for Pellet Fuels Institute Annual Conference 

Attendee registration for the 2023 Pellet Fuels Institute Annual Conference is now officially open. Please make plans to join the Pellet Fuels Institute membership and board of directors June 6-8 in Austin, Texas. We are looking forward to hosting our members and attendees in a great city with great food and music. Please make plans to attend today. 

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