Pellet manufacturers - getting nervous

JustWood · Aug 22, 2008

Mills here have been running 1-3 day weeks all summer (ones that aren't mothballed). Mills I do business with just had a 2 week shutdown begining of Aug and now plan another 2 week shutdown first part of Sept.

We haul up to 200 tons/week wood waste(some marketed for firewood and some as grinder feedstock for mulch) but this # has been substantially less this year. In the last month have had 3 pellet manufacturers call looking for raw material. This has NEVER happened before. I think they are getting nervous about raw material supply. My feeling as was back in Jan. that the proverbial sheet is going to hit the fan very soon with supply and pricing .

hoverfly · Aug 22, 2008

LEES WOOD-CO said:
Mills here have been running 1-3 day weeks all summer (ones that aren't mothballed). Mills I do business with just had a 2 week shutdown begining of Aug and now plan another 2 week shutdown first part of Sept.

We haul up to 200 tons/week wood waste(some marketed for firewood and some as grinder feedstock for mulch) but this # has been substantially less this year. In the last month have had 3 pellet manufacturers call looking for raw material. This has NEVER happened before. I think they are getting nervous about raw material supply. My feeling as was back in Jan. that the proverbial sheet is going to hit the fan very soon with supply and pricing .

Yes and no, they may start looking in preparing whole tree wood chips to supplement lack of saw dust. However many will have to modify and invest in to new equipment. New England Pellets in Jaffry NH uses whole tree chips by grinding them down into slivers before making pellets.

JustWood · Aug 22, 2008

Doesn't matter if they chip or not. Isn't much logging going on anywhere. Besides they have to compete with pulp mills who are paying $50+/ ton for pulp. Pulp market reports are upwards of $100/ton in some places of North America.

Pole firewood is going for $40+/ ton also. What logger wouldn't take a little less for CASH $$$$ in his pocket and probably truck it half the distance compared to going to a pellet/pulp plant. The savings in trucking alone would make up the difference in price.

Hbbyloggr · Aug 22, 2008

Hoverfly said:
LEES WOOD-CO said:

Mills here have been running 1-3 day weeks all summer (ones that aren't mothballed). Mills I do business with just had a 2 week shutdown begining of Aug and now plan another 2 week shutdown first part of Sept.

We haul up to 200 tons/week wood waste(some marketed for firewood and some as grinder feedstock for mulch) but this # has been substantially less this year. In the last month have had 3 pellet manufacturers call looking for raw material. This has NEVER happened before. I think they are getting nervous about raw material supply. My feeling as was back in Jan. that the proverbial sheet is going to hit the fan very soon with supply and pricing .

Click to expand...

Yes and no, they may start looking in preparing whole tree wood chips to supplement lack of saw dust. However many will have to modify and invest in to new equipment. New England Pellets in Jaffry NH uses whole tree chips by grinding them down into slivers before making pellets.

Jaffrey does not use whole tree chips. They can't use bark , leaves, needles and such in their process. They are probably using first cut cordwood lengths, de-barking them and then breaking down the fiber to chips then regrind. I tried selling them my sawdust from the cordwood processor but they said there was bark in it and that was not acceptable.

stoveguy2esw · Aug 22, 2008

Weigle Tree Service said:
Hoverfly said:

LEES WOOD-CO said:

Mills here have been running 1-3 day weeks all summer (ones that aren't mothballed). Mills I do business with just had a 2 week shutdown begining of Aug and now plan another 2 week shutdown first part of Sept.

We haul up to 200 tons/week wood waste(some marketed for firewood and some as grinder feedstock for mulch) but this # has been substantially less this year. In the last month have had 3 pellet manufacturers call looking for raw material. This has NEVER happened before. I think they are getting nervous about raw material supply. My feeling as was back in Jan. that the proverbial sheet is going to hit the fan very soon with supply and pricing .

Click to expand...

Yes and no, they may start looking in preparing whole tree wood chips to supplement lack of saw dust. However many will have to modify and invest in to new equipment. New England Pellets in Jaffry NH uses whole tree chips by grinding them down into slivers before making pellets.

Click to expand...

Jaffrey does not use whole tree chips. They can't use bark , leaves, needles and such in their process. They are probably using first cut cordwood lengths, de-barking them and then breaking down the fiber to chips then regrind. I tried selling them my sawdust from the cordwood processor but they said there was bark in it and that was not acceptable.

if you produce enough to be worth it , you might contact energex, they make an industrial pellet for boilers as well, maybe they would be interested.

just a thought...

Shortstuff · Aug 22, 2008

I recently learned that new housing construction was down 8% this year (compared to last year) and if you consider the increase in pellet stove purchases, I can see the increase on the pellet manufacturers.

Steve

hoverfly · Aug 23, 2008

Weigle Tree Service said:
Hoverfly said:

LEES WOOD-CO said:

Mills here have been running 1-3 day weeks all summer (ones that aren't mothballed). Mills I do business with just had a 2 week shutdown begining of Aug and now plan another 2 week shutdown first part of Sept.

We haul up to 200 tons/week wood waste(some marketed for firewood and some as grinder feedstock for mulch) but this # has been substantially less this year. In the last month have had 3 pellet manufacturers call looking for raw material. This has NEVER happened before. I think they are getting nervous about raw material supply. My feeling as was back in Jan. that the proverbial sheet is going to hit the fan very soon with supply and pricing .

Click to expand...

Yes and no, they may start looking in preparing whole tree wood chips to supplement lack of saw dust. However many will have to modify and invest in to new equipment. New England Pellets in Jaffry NH uses whole tree chips by grinding them down into slivers before making pellets.

Click to expand...

Jaffrey does not use whole tree chips. They can't use bark , leaves, needles and such in their process. They are probably using first cut cordwood lengths, de-barking them and then breaking down the fiber to chips then regrind. I tried selling them my sawdust from the cordwood processor but they said there was bark in it and that was not acceptable.

Close enough, they have another source than saw dust.

hoverfly · Aug 23, 2008

LEES WOOD-CO said:
Doesn't matter if they chip or not. Isn't much logging going on anywhere. Besides they have to compete with pulp mills who are paying $50+/ ton for pulp. Pulp market reports are upwards of $100/ton in some places of North America.

Pole firewood is going for $40+/ ton also. What logger wouldn't take a little less for CASH $$$$ in his pocket and probably truck it half the distance compared to going to a pellet/pulp plant. The savings in trucking alone would make up the difference in price.

loggers who were doing lumber could very well supply the pulp market or even the pellet marked, it just takes time for such changes to happen. I see the housing market being stagnant for many years before we see a recovery, the sooner the loggers see that the sooner they can continue to make money. People are all ways looking for ways to make money. At this day and age you have to be flexible and thinking what to do next even when the going is good at the time.

GVA · Aug 23, 2008

stoveguy2esw said:
Weigle Tree Service said:

Hoverfly said:

LEES WOOD-CO said:

Mills here have been running 1-3 day weeks all summer (ones that aren't mothballed). Mills I do business with just had a 2 week shutdown begining of Aug and now plan another 2 week shutdown first part of Sept.

We haul up to 200 tons/week wood waste(some marketed for firewood and some as grinder feedstock for mulch) but this # has been substantially less this year. In the last month have had 3 pellet manufacturers call looking for raw material. This has NEVER happened before. I think they are getting nervous about raw material supply. My feeling as was back in Jan. that the proverbial sheet is going to hit the fan very soon with supply and pricing .

Click to expand...

Yes and no, they may start looking in preparing whole tree wood chips to supplement lack of saw dust. However many will have to modify and invest in to new equipment. New England Pellets in Jaffry NH uses whole tree chips by grinding them down into slivers before making pellets.

Click to expand...

Jaffrey does not use whole tree chips. They can't use bark , leaves, needles and such in their process. They are probably using first cut cordwood lengths, de-barking them and then breaking down the fiber to chips then regrind. I tried selling them my sawdust from the cordwood processor but they said there was bark in it and that was not acceptable.

Click to expand...

if you produce enough to be worth it , you might contact energex, they make an industrial pellet for boilers as well, maybe they would be interested.

just a thought...

My employer gives all its wood chips/sawdust away to paper mills,saves us the hassle of disposal too.
The MDF dust goes to a local power plant that burns it in the boiler. and from what I hear it burns hotter than he!!....
maybe the pellet people could use MDF to supplement the supply, could be the first nuclear pellet........... Maybe I should start making them.. :coolhmm:

Willman · Aug 23, 2008

The Maine Celotex plant has been shut down for a few weeks now. Will start back up with half the crew as they are no longer going to make the Celotex board. This cuts into the local logging volume for sure.They are only going to make expansion product for highway construction. When we stop rebuilding Iraq maybe our roads will be next.
Reason for downsizing stated was the high cost of energy used in manufacturing process. Higher profit with highway product than a nonexistent housing market. The property is filled to capacity with finished product.

Will

JustWood · Aug 23, 2008

Hoverfly said:
LEES WOOD-CO said:

Doesn't matter if they chip or not. Isn't much logging going on anywhere. Besides they have to compete with pulp mills who are paying $50+/ ton for pulp. Pulp market reports are upwards of $100/ton in some places of North America.

Pole firewood is going for $40+/ ton also. What logger wouldn't take a little less for CASH $$$$ in his pocket and probably truck it half the distance compared to going to a pellet/pulp plant. The savings in trucking alone would make up the difference in price.

Click to expand...

loggers who were doing lumber could very well supply the pulp market or even the pellet marked, it just takes time for such changes to happen. I see the housing market being stagnant for many years before we see a recovery, the sooner the loggers see that the sooner they can continue to make money. People are all ways looking for ways to make money. At this day and age you have to be flexible and thinking what to do next even when the going is good at the time.

Sure they can BUT if there isn't any high grade logging going on then NO pulp is coming out of the woods either.

hoverfly · Aug 23, 2008

LEES WOOD-CO said:
Hoverfly said:

LEES WOOD-CO said:

Doesn't matter if they chip or not. Isn't much logging going on anywhere. Besides they have to compete with pulp mills who are paying $50+/ ton for pulp. Pulp market reports are upwards of $100/ton in some places of North America.

Pole firewood is going for $40+/ ton also. What logger wouldn't take a little less for CASH $$$$ in his pocket and probably truck it half the distance compared to going to a pellet/pulp plant. The savings in trucking alone would make up the difference in price.

Click to expand...

loggers who were doing lumber could very well supply the pulp market or even the pellet marked, it just takes time for such changes to happen. I see the housing market being stagnant for many years before we see a recovery, the sooner the loggers see that the sooner they can continue to make money. People are all ways looking for ways to make money. At this day and age you have to be flexible and thinking what to do next even when the going is good at the time.

Click to expand...

Sure they can BUT if there isn't any high grade logging going on then NO pulp is coming out of the woods either.

Well then we are S.O.L. are we not?

JustWood · Aug 23, 2008

Sure doesn't look good.

kinsmanstoves · Aug 23, 2008

Corn is still an option in this area. Kinda expensive but it does burn in the right stoves and is cheaper than LP or #2 fuel oil.

Eric

kilarney · Aug 24, 2008

LEES WOOD-CO said:
Sure doesn't look good.

The problem is that you've been crying "wolf" for a long time now.

MainePellethead · Aug 24, 2008

In this area I am more worried about the "transportation expense" than shortage of wood. That seems to be more of the problem for price increase in this neck of the woods.

DiggerJim · Aug 24, 2008

MainePellethead said:
In this area I am more worried about the "transportation expense" than shortage of wood. That seems to be more of the problem for price increase in this neck of the woods.

Yeah - it's interesting that you're in the "land of lumber" but are paying 50% more for pellets than the folks in Ohio are. Doesn't seem right.

muss · Aug 24, 2008

Not concerned with pellet shortage here in Maine as 2 manufacturers own their own acreage of woodlots . Prices though are rising cause of demand not supply . I'm sure there are other pellet manufacturers that have long term contracts with loggers, it only makes sense that they have. So enuff of the crying wolf already unless it's in your best interest . Muss

JustWood · Aug 24, 2008

muss said:
Not concerned with pellet shortage here in Maine as 2 manufacturers own their own acreage of woodlots . Prices though are rising cause of demand not supply . I'm sure there are other pellet manufacturers that have long term contracts with loggers, it only makes sense that they have. So enuff of the crying wolf already unless it's in your best interest . Muss

Kilarney and Muss,

BARRROOOOOOOOOOOOOOOOOOOOOOOOOOO !!!

heheheheheheheheheheheheheh.
NOT crying wolf about anything just letting you pelletheads know whats going on in the industry! When YOU are in direct contact with raw product procurment of pellet companies then YOU can let us know whats going on.

I NEVER ,NEVER ,NEVER (check previous posts) said there would absolutely,100%, for sure, be shortages. I did say that there is a good posibility that it could happen. And, depending on several factors ,there easily could be in certain areas.I did predict $300/ton and here we are 3 months before the kickoff to heating season with most of NE at that/around that price.

FACTORS:
Value of the dollar-If it remains low then exports will be profitable. Therefore , less pellets staying in the US.
Price of oil- Makes for the transport of pellets from the upper midwest or any great distance (where there is a surplus) unprofitable.
Lumber exports- What little lumber that is being made here is being exported to Canada , European, and Asian markets .I don't think they will return the sawdust when their countries are in the same "Energy Pickle "we are.
Lack of loggers and mills-You would sheet your drawers if you knew the infrastructure being dismantled right at this very moment.
There are several other factors but these are the main ones.

When you have been in the business 20+ years and read and analyze chip,pulp,lumber,and sawlog market reports on a weekly basis and talk to the people in the pellet business first hand you KNOW what's going on in the industry.Sorry to burst your bubble but I AM in the know!

kilarney · Aug 24, 2008

LEES WOOD-CO said:
FACTORS:
Value of the dollar-If it remains low then exports will be profitable. Therefore , less pellets staying in the US.
Price of oil- Makes for the transport of pellets from the upper midwest or any great distance (where there is a surplus) unprofitable.
Lumber exports- What little lumber that is being made here is being exported to Canada , European, and Asian markets .I don't think they will return the sawdust when their countries are in the same "Energy Pickle "we are.
Lack of loggers and mills-You would sheet your drawers if you knew the infrastructure being dismantled right at this very moment.
There are several other factors but these are the main ones.

So the top factors you list are all applicable to burning cordwood as well. Am I missing something here?

JustWood · Aug 24, 2008

kilarney said:
LEES WOOD-CO said:

FACTORS:
Value of the dollar-If it remains low then exports will be profitable. Therefore , less pellets staying in the US.
Price of oil- Makes for the transport of pellets from the upper midwest or any great distance (where there is a surplus) unprofitable.
Lumber exports- What little lumber that is being made here is being exported to Canada , European, and Asian markets .I don't think they will return the sawdust when their countries are in the same "Energy Pickle "we are.
Lack of loggers and mills-You would sheet your drawers if you knew the infrastructure being dismantled right at this very moment.
There are several other factors but these are the main ones.

Click to expand...

So the top factors you list are all applicable to burning cordwood as well. Am I missing something here?

No.
Lack of loggers and mills maybe.
Cordwood burners have many other options for sourcing firewood other than mills and loggers.

slls · Aug 24, 2008

"quote"Lumber exports- What little lumber that is being made here is being exported to Canada , European, and Asian markets .I don’t think they will return the sawdust when their countries are in the same “Energy Pickle “we are.
Lack of loggers and mills-You would sheet your drawers if you knew the infrastructure being dismantled right at this very moment. 'Quote"

Most lumber in the NE comes from Canada.

JustWood · Aug 24, 2008

Softwood -Yes
Hardwood -No

Only because of transportation costs and logistics and the lack of softwood structural timber in NE.
Most trucks delivering softwood lumber to NE return to Canada with high quality hardwood lumber or veneer logs.

Interior Canada has very little hardwood other than poplars.

Ductape · Aug 24, 2008

My neighbor stopped over this morning while i was out in the yard. He told me he read in a newspaper (or saw on the news) that NEWP in Jaffrey (NH) claimed they may not be producing pellets this year due to the fire. This was the first i've heard that they will be that far behind. Anyone heard the same??

DiggerJim · Aug 24, 2008

Ductape said:
My neighbor stopped over this morning while i was out in the yard. He told me he read in a newspaper (or saw on the news) that NEWP in Jaffrey (NH) claimed they may not be producing pellets this year due to the fire. This was the first i've heard that they will be that far behind. Anyone heard the same??

It wasn't that bad a fire based on the news reports. This one is linked on their home page: http://www.pelletheat.com/media/NEWPJaffrey.pdf and suggests they're back & running about now.

Pellet manufacturers - getting nervous

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