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

July 23, 2021 

In this Week's Pellet Wire:

From the Director's Desk: 

Our Late Spring Inventory Build

How much wood pellet inventory is sitting on the ground right now? While we might make guesses of varying levels of education, no one will no for certain until the EIA publishes their July data in mid-October. As I write this column and wonder, it isn’t out of the question that we’ve got 300,000 tons on the ground. Its been since September of 2018 since we had that much inventory on the ground and throughout 2019 and 2020 producers demonstrated little interest in laying in that kind of product.

Nevertheless, the accumulated data now current through April certainly points toward a summertime peak north of 300,000. After our inventory swelled to 170,000 tons as March to a close I offered this prediction:

We won’t know until mid-October but I suspect we’ll exit this July with more inventory on the ground than last July, but not by much. I’d say the industry ends up with somewhere between 230,000 and 250,000 tons on the ground after posting a string of months where production was 85-90% of 2020 numbers.”

I’d defend my thinking when writing that, because through March production numbers this year have lagged 2020 numbers and in April, we reversed that trend topping 2020’s soft April of 122,657 tons by about 15,000 tons. Without a strong drawdown on the sales side a good share of this production went straight to storage and April closed with 236,534 tons of product on the ground. In two months the sector grew inventory by over 100,000 tons. We’ve not done that before. It will be interesting to see if producers chose to dramatically roll out of the throttle in May or if we’ll be headed into the heating season with 300,000 tons-plus of product in inventory. The average inventory increase from April to July since 2016 is just over 90,000 tons. The data is a bit of a scatter with a range of 43,507 to 124,353 tons. I’ll stick with the law of averages and predict July inventory at 325,000 tons. Interestingly, the last time July saw over 300,000 tons on the ground was 2018. Retailers drew down on this inventory hard and the industry limped out of that heating season with just 46,000 tons left at producer sites nationwide. When mother nature is the X-factor anything can happen. For now, it seems like the will be ready and stocked up should a longer and deeper winter hit one or more pellet-burning regions.

Progetto Fuoco Study Group

What are you doing in late February? Are you interested in traveling to Italy to see the world’s largest wood pellet trade fair? The Progetto Fuoco, is held every other year in Verona, Italy a charming town in the northeastern part of the country. The show’s breadth includes the whole of the wood heating industry throughout Europe with appliance manufacturers, parts and pieces suppliers and plenty of wood pellet producers looking to sell into the robust Italian home heating market. Producers from all over Europe come, put up their shingle and take orders for their produced tonnage.

I have visited the show once in 2016. I wrote a longer piece for Pellet Mill Magazine and I read some of it again this week. It's clear I was smitten with the show, the energy and all that there was to learn. If you want to get a more in-depth feel for the event I’ve linked the article here.

The PFI is considering organizing a study group of industry professionals who would like to add this trip to their list of professional experiences. We’ve got a steering group formed and will be meeting more regularly through the summer to come up with a plan on how to make the most of the experience for those members who make the trip and the PFI. If you would like to be included on a list of “interested persons” please send me a short note. I’ll add you to the communications and thinking of the study group as we put some more meat on the bone.

Note: All of this hinges on the trajectory of the pandemic, of course, and that is a consideration we’ll have to work through. 

Tim Portz 
Executive Director

Progetto Fuoco Exhibit Booth

Oh the sites you’ll see: Wood pellet producers at the Progetto Fuoco often have small, private offices within their booth in which they conduct real business, haggle over pricing, and close deals. This clear igloo was one producer taking that concept to a very cool extreme in a photo from the 2016 show. 

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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Please get in touch with Tim Portz via email at [email protected] with information on your company's growth, job openings, promotions, or other news. 

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Pellet Fuels Institute

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