Low oil prices challenge wood pellet market

Maria Church
August 03, 2016
Written by
Aug. 3, 2016 - The wood pellet industry will continue to see lower demand as the price of alternative fuels such as heating oil dips below the price of pellets, one expert predicts. 

 

In an interview with Argus Media at Argus Biomass 2016 in London, William Strauss, president and founder of FutureMetrics, said the low price of oil has dropped the cost of alternative fuels, which are now are cheaper than pellets.

"Demand for heating pellets has slowed down tremendously, not only in Maine, but throughout the Northeast and actually all the northern states," Strauss said.

“There will still be demand, particularly in the bulk market where we still see demand holding up just fine, but in the bagged pellet market it’s going to be a very difficult year,” he said.

The outlook for the industrial pellet industry is more optimistic, Strauss said, particularly if the Dutch and Japanese markets open up as expected.

Strauss goes on to speak about challenges facing the wood pellet industry, future markets, and potential improvements to the image of biomass.

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