News
EU pellet market ready to explode…maybe
November 28, 2012, Quebec, QC - Picking up where WPAC executive director Gordon Murray left off (see our first report on the WPAC AGM in Quebec City), Arnold Dale of the Ekman Group returned to trends in the international pellet market. He expects some impressive growth.
November 28, 2012 By Scott Jamieson
His
Swedish-based company represents forest products producers worldwide, and has
moved strongly into pellet markets over the past few years, including a 900,000-ton plant in Russia
with plans to add another million tons.
While stressing the uncertainties of politically driven
power generating markets around the world, and the many wild cards that reality
entails, Dale's message was essentially one of significant growth
opportunities, especially in the UK. He expects some hiccups as coal power
generators there move increasingly to biomass, adding that they will likely set
the pace to ensure adequate pellet supply at a reasonable price. Still, even
with one or two plants converting at a time, he forecasts a switch involving
roughly 2 GW.
"With each plant you are talking 2.3 million tonnes, and I
can see a need for some 7.3 million tonnes by 2017 in the UK alone. The
question is where will it come from?" No doubt some Canadian producers would
like to provide the answer, although they will not be alone. Dale expects the
big growth in supply to come from the US south, South America, and Russia. Yet there will
be opportunities everywhere that logistics allow.
"With the demand we are expecting, and the pace at which it
will happen, there will even be a market for the smaller players, the 50,000 to
200,000 tonne plants – the need will just be that great."
Dale also sees massive opportunity in the domestic heat
market across Europe, a market he feels much more comfortable forecasting. Europeans
currently consume some seven million tonnes of pellets to stay warm (a similar
amount to industrial power consumers).
"The math is a little easier: You know how many pellet
boilers were sold this year in Italy and Austria for example. If 160,000
boilers were added in Italy this year, they will need 320,000 tonnes of bagged
pellets next year to run them, and for the next decade as well."
With the torrid pace of pellet stove sales in countries like
Italy, Austria and Spain, Dale predicts the current seven million tonnes of
pellets to become 14 million by 2015, and a staggering 20 million by 2020. The
consuming nations simply no longer have the forest industries to support that
volume, a fact that should make hardcore industrial suppliers look at
diversification.
"Even if you are currently in the industrial market, I
suggest you start looking at the European domestic bagged market for a portion
of your production."
Print this page
