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In this Week's Pellet Wire:
From the Director's Desk: Summer Hanging On
No one cheers a first frost like wood pellet manufacturers. Pellet consumption correlates tightly to home heating days and in most pellet burning locales, heating degree days (HDD) in these first weeks of October are lagging. Consider these numbers from a handful of cities nestled in prime pellet burning regions:
- Portland, Maine –HDD down 46% compared to norm
- Burlington, Vermont – HDD down 68% compared to norm
- Buffalo, NY – HDD down 81% compared to norm
- Harrisburg, PA – HDD down 79% compared to norm
- Spokane, WA – HDD down down 35% compared to norm
To be fair, most industry observers would consider October 15 very early on in the home-heating season and I expect these numbers to come closer to historical averages as the season progresses. Still, everyone would cheer a flipped script with early frosts reported across pellet land.
Next week the EIA will publish its July data and we’ve been watching with interest as inventory numbers at manufacturing sites have climbed to heights not seen in three years. While numbers from July won’t reflect the unseasonably warm fall we’re in the middle of right now, I still suspect we’ll see some lighter than normal sales numbers and the U.S. total inventory number to jump up above 300,000.
Biomass Magazine Conducting Industry Survey
Since we gathered in Louisville in June one of the biggest stories in our sector (likely in all sectors) has been the inflationary pressure on everything required to make, bag and ship pellets. I’m a big believer in industry surveys and think they add great value to those operating in the space. One invitation per facility was sent by Biomass Magazine Editor Anna Simet and responses will be accepted through next week. If you haven’t received a survey invitation or have a question for Anna she can be reached asimet (at) bbiinternational.com.
Happy Retirement to Lester Yoder, Fiber By-Products
While visiting with the team at Fiber By-Products and touring their facility I was introduced to Lester and learned he was days from retirement. Lester was a part of the Fiber By-Products team from October 1, 2007 – October 1, 2021. Congratulations Lester. Enjoy Your Retirement.
Stop the Press! – EIA Predicts Significant Increase in Heating Homes this Winter
This edition of the Pellet Wire was already in the can as they say in the movie business when the EIA released the report included in the Industry News section of this edition of the Pellet Wire. On Thursday, news outlets all over the country picked up the story. While wood pellets are not immune from inflationary pressures, one of our calling cards has always been less volatility in retail pricing. I’m particularly interested in the predictions of heating oil and propane prices. The NPR story I included in the Industry News suggests each are expected to cost nearly 50% more. If that plays out, those homeowners with both pellet and oil or gas appliances will certainly lean on their pellet appliance to carry more of the load. The good news is, pellet inventories look strong and I think we’re well positioned for the uptick that comes along with high fossil-derived heating fuel prices.
—Tim Portz
Executive Director
Photo of the Week:
Pellet People: Photographed during a recent Chairman’s Tour through Michigan and Indiana, these team members are who make the pellet industry tick.
Clockwise from top left: James Ackerson, Michigan Wood Fuels; Lester Yoder (retired), Fiber By-Products; Greg Eberhard, Fiber By-Products; John McAdow, Easy Heat; Rick Ralston, Easy Heat; Samantha Keegan, Fiber By-Products.
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Send Us Photos! Help us build a collection of photos of our members, their pellets mills, and product! Send images to Tim Portz at [email protected].
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Industry News
Lumber Prices Stage a Late Season Rally
The gains aren’t likely the start of a wild ride like the one this past spring, analysts and executives say, but the increases show how some of this year’s surge in the price of raw materials is lingering.
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Another bubble in the making? Lumber prices spike 33%
Just when exorbitant lumber prices seemed to be behind us, prices are rising again—and experts expect them to climb even higher.
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Toyo to construct 50-MW biomass power plant in Japan
Toyo Engineering Corp. and Nippon Steel Engineering Co. Ltd. have been awarded a contract to construct a 49.9 megawatt (MW) dedicated biomass power plant in Karatsu-shi, Saga, Japan for Karatsu Biomass Energy G.K.
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U.S. households will pay more to heat their homes this winter, officials say
U.S. households can expect to spend more money to heat their homes this winter compared with last year, federal officials announced.
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EIA expects U.S. households to spend more on energy this winter
Forecast expenditures are based on our expectations of high retail energy prices—many are already at multiyear highs—and of slightly more energy consumption per household than in the previous winter.
Read More
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