Canadian Biomass Magazine

North American biomass prices diverge

October 20, 2010
By Argus Media

Oct. 20, 2010, New York, NY – Price direction diverged sharply for North American industrial pellets in the prompt-delivery period.

Oct. 20, 2010, New York, NY – Price direction diverged sharply for North American
industrial pellets in the prompt-delivery period, with east coast export and
domestic prices mixed, and western United States prices rising on reports of
domestic purchases of wood pellets. Concerns about the regional effects of an
impending Massachusetts decision on wood biomass fuel use have slowed buying in
that state and in the surrounding New England area for much of 2010, with export
wood pellets the only large-scale demand source for new pellet purchases.
Indications from producers and buyers of biomass fuel in mid-October 2010 that
they expect the final decision from Massachusetts to exclude biomass from
benefiting from the region's renewable fuel credits system prompted a sharp
sell-off in what material was available, driving the price lower.

“Not only could the market for most non-domestic wood biomass fuel in Massachusetts
disappear, the entire market for [renewable energy credits] in the northeast
could be destroyed,” one wood pellet producer in the region says. Prices have
fallen by as much as $10/ton since late September 2010 as the state has neared
release of its anticipated ruling on biomass fuel use. Also, a recent sale reported
at $120/ton for prompt delivery weighed on the market.

The decline of the U.S. northeast marked a sharp divergence from southeastern
export and domestic industrial wood pellet prices. This was the first notable
divergence since October 2009 and is an unusual move in markets that have
tended to mirror each other. New fuel sales on the domestic and export wood
pellet and wood chip market have continued in the U.S. southeast, where
regional electricity regulators have encouraged the production and use of biomass fuel.

Along the U.S. Gulf of Mexico coast, a decision to incorporate the pellet and wood chip
industry's broad definition of biomass fuel in a Louisiana renewable fuel
program was applauded by project developers, who have followed up with new
solicitations for biomass. Florida producers and biomass transporters also
reported longer term and spot deals, with interest from the state's large
generators driving renewed activity after a low-volume summer.


New sales of wood biomass fuel were also heard in the northwestern United States and
western Canada after several weeks of lackluster trading that dragged on price
gains while the eastern United States benefited from cold-weather-related
buying. Adage reports that it has signed new deals in the region and will seek
significant amounts of new woody raw materials from its partners and the
broader market because it provides biomass fuel to comparatively large
generating units based on its 55-MW biomass generators.

Please visit for more information.

Copyright © 2012 Argus Media Ltd. All rights reserved. By reading
this article, you agree that you will not copy or reproduce any part of
its contents (including, but not limited to single prices or any other
individual items of data) in any form or for any purpose whatsoever
without prior consent of the publisher.

Print this page


Stories continue below