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New capacity will grow Canadian pellet exports

December 11, 2013, Seattle, Wash. – Canadian pellet export growth is currently trailing growth in the U.S. southeast, but additional capacity in several Canadian provinces is expected to change that, according to data compiled by WRI and reported in the North American Wood Fiber Review (NAWFR).


December 12, 2013
By Wood Resources International

December 11, 2013, Seattle, Wash. – Canadian pellet export
growth is currently trailing growth in the U.S. southeast, but additional
capacity in several Canadian provinces is expected to change that, according to
data compiled by WRI and reported in the North American Wood Fiber Review
(NAWFR).

Pellet export volumes from North America to Europe continued
to rise during the 2Q/13, representing steady growth for the past seven
quarters. In that period of time, volumes exported to Europe have more than
doubled, from just over 500,000 tons in the 3Q/11 to over 1.1 million tons in
the 2Q/13.

Most of the increase in exports over the past two years has
been from the US South, while exports from the other major supply region,
British Columbia, have been growing at a fairly modest rate since early 2011.
In the 2Q/13, pellet volumes exported from Canada were nearly static from the previous
quarter, which was a reflection of a pellet-producing sector running at close
to full operating rate and with limited investment in new capacity planned for
the past few years. With additional capacity in British Columbia, Ontario,
Quebec and Nova Scotia, pellet exports from Canada will probably expand
significantly in the coming year. To date, Canada’s share of the total exports
from North America accounted for 38% in the 2Q/13, which was down substantially
from 62% just two years ago.

In the US South, pellet export volumes in the 2Q/13
increased 16% from the previous quarter to just over 700,000 tons. In the
second half of 2013, pellet trade data will also reflect additional shipments
from US Gulf Coast ports in Texas and Alabama, because new plants have started
their commercial operations in the 3Q/13, as reported in the NAWFR (www.woodprices.com).

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The United Kingdom is the major importer of
pellets exported from North America. However, pellet shipments from North
America into the UK likely peaked in the 2Q/13 for this year, as RWE’s major
biomass power plant in Tilbury shut down in August 2013. Power plants utilizing
pellets in the UK are still on track to increase their volumes consumed over the
next several years, but the ramp-up may not continue as smoothly as has been
seen in the past two years.

 


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