Catch up with PFI in this issue of the Pellet Wire!

September 16, 2022

From the Director's Desk: 

Your Average September ..?, Foreign Ag Service, Miami Vice

Your Average September ..?

It will be nearly Christmas before the EIA publishes September’s Monthly Densified Biomass Fuel Report and we get a clear look at how this important sales and production month shook out in 2022.

Using the data available from the EIA and looking back to September of 2016, here are some interesting data points (all in tons):

  • September production average: 145,660 (3rd ) – 150,916 last year
  • September sales average: 215,415 (3rd ) – 220,454 last year
  • September inventory depletion average: 35,510 – 15,464 last year
  • Inventory position average: 331,566 tons – 254,422last year
  • September production record: 186,559 (2019) – 150,916 last year
  • September sales record: 229,327 (2019) – 220,454 last year

September is a big month for our sector. The month sees the summer inventory build overlap with the tail end of the early buy season. The month may begin with pellet appliances idled and cold, but the month doesn’t end without most pellet appliances getting at least a test fire.

Production and sales are both strong across the sector, each ranking third when the months are sorted most to least in each category. I think a record production month is certainly possible this September but it would take a significant departure from last year. While we can’t see production numbers past May in the current EIA data set, what I can see is that production from March – May was up significantly over each month’s average production. In March U.S. production was 141,000 tons (18% higher than the monthly average), in April production was 130,000 tons (15% higher) and in May production was 143,000 (13% higher).

What I find interesting about those higher production numbers is they came along with disappointing and soft sales numbers. Only in May did the sector experience an above average sales numbers with March and April well underneath monthly averages (March 2022 – 70,535 tons vs. Mar avg. of 120,459 and April 2022 – 82,062 tons vs. Apr. avg of 100,517 tons). Still, producers operated a higher-than-average throughput. I’ve got to assign some of that discrepancy to the continued discussions, interest and inbound inquiries regarding wood pellets needed by overseas buyers. If we’d exited the winter on the wood pellet ‘low fuel light’ I’d probably point to that, but inventories for wood pellets through the last months of the heating season were strong, at five-year highs in most cases.

Foreign Ag Service Tea Leaves

One of the news items in the Industry News section is a short online news blurb about the data released by the Foreign Ag Service (FAS). The FAS maintains a multitude of different data sets for all manner of grown and raised agricultural commodities. Wood pellets are a commodity they track. Additionally, the data becomes available a little sooner than similar data at the EIA. This quote includes data through July. This quote from the story got my attention.

“Total wood pellet exports for the first seven months of 2022 reached nearly 4.97 million metric tons at a value of $851.09 million, compared to 4.12 million metric tons exported during the same period of last year at a value of $596.7 million.”

A 20% jump in sales is one thing, a 40% jump in revenue is quite another. Clearly foreign demand is impacting not only shipments, but landed prices as well.

Miami Vice

The Pellet Fuels Institute Board of Directors will host its fall board meeting at the Fontainebleau Hotel in conjunction with the Exporting Pellets conference. Our board will meet Tuesday afternoon allowing producers who are interested to take in the conference.

If you’re interested in joining us, please contact me. 

—Tim Portz
 Executive Director

Save the Date 2023

PFI 2022 Annual Conference

Send Us Your Photos! Help us build a collection of photos of our members, their pellet mills, and products! Send images to Tim Portz at tim@pelletheat.

Industry News

EIA Monthly Densified Biomass Report (with May data)

As of May 2022, the monthly data collection included 80 operating manufacturers of densified biomass fuel. These manufacturers had a total production capacity of 13.27 million tons per year and collectively had an equivalent of 2,455 full-time employees.

Read Article

Heating Degree Days Data

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Enviva supplies biomass to Alder Fuels for use as SAF feedstock

Enviva Inc., the world’s leading producer of sustainably sourced woody biomass, and Alder Fuels, a clean tech developer and greencrude producer, have signed a contract for the long-term, large-scale supply of woody biomass from Enviva, which sources low-value fiber, such as forest byproducts like tree tops, limbs, and commercial thinnings, to further commercialize the supply of sustainable aviation fuel (SAF).

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NREL study highlights emissions reduction potential of BECSS

The U.S. Department of Energy on Aug. 30 released a report by the National Renewable Energy Laboratory that examines the types of clean energy technologies and the scale and pace of deployment needed to achieve a net-zero power grid in the U.S. by 2035. Bioenergy carbon capture and storage (BECCS) is among the technologies addressed in the report.

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USDA: US pellet exports at 649,186 metric tons in July

The U.S. exported 649,185.7 metric tons of wood pellets in July, down from 832,092.2 metric tons the previous month, but up when compared to the 546,519.1 metric tons exported in July 2021, according to data released by the USDA Foreign Agricultural Service on Sept. 7.

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Home Heating Oil Prices Set to Skyrocket in NH this Winter  

Granite State homeowners prepare for a rise in oil prices before the end of 2022. Oil prices are around $6 per gallon, which will increase by the end of the year to $8 or $9 per gallon. More than 40% of New Hampshire homes rely on fuel oil as their main heat source.

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Low Fuel Inventories Cause Special Concern in US Northeast

Diesel and heating oil supplies in the Northeast are more than 50% below the recent average, raising concerns that an extreme weather event could cause supply disruptions, federal officials said.

Read Article

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