Housing Starts Up 22% in Feb, Pellet prices decrease?

You know....I watched pellets prices climber higher with the excuses that it was expensive to haul with fuel prices through the roof. Fuel came down....pellets did not. Perhaps if we had huge consistent housing starts maybe pellets would come down.....I dont see pellets coming down to much...at least in the Northeast where we depend alot on these things. I hope they fall hard as I hear of more and more not using pellets and using other sources for now.

Sadly.....My primary heat source is propane and that is still ALOT higher than pellets even at $300.00 a TON.

My nephew has just completed his raised ranch (approx 2,000sq ft) and chose propane. he has filled his 1500 gal tank twice. Oct 2008 and Feb 2009. The Feb propane fill was $2,900.00.
He`s sorry now but back in the summer when he was building the house , folks were locking into oil for $4.29 a gal.
It`s been a crazy year and we can probably expect more.

Huge warehouses of finished high grade lumber are chucked to the gills in anticipation of a recovering housing market. This is a pretty common occurence in slow times for mills to keep their employees working. It also benefits the mill as they have bought up cheap timber during slow times , store it then profit from higher finished lumber prices during boom times when production can't keep up with demand.

Heres an article about low grade production as of late in regards to souring prices and demand. The terminology may be hard for those not familiar with the biz to understand but I think most will get the jist of the article.It's not looking good near term for fresh raw material for pellets entering the biomass market.


http://www.palletenterprise.com/articledatabase/view.asp

Backstreets75 said:

Sadly.....My primary heat source is propane and that is still ALOT higher than pellets even at $300.00 a TON.

Click to expand...

If that is true, you might be getting ripped off.

LP is $1.50 in western MA.

It would take about 12 lbs of pellets to make the same BTU.

That would cost about the same price - maybe more.

Example - $300 a ton delivered - divide 2000 into 300 and we get 15 cents a pound. 12x15= $1.80

That does not take your labor and other stuff into account.......

I would not buy for next year.....still some heating season left this year. I suspect, although one can never bet on it, that pellet prices will drop as soon as the heating season completely ends.

I could be wrong....but given the current course of things...I don't see a repeat of the Crisis of last year with doubling and tripling of oil prices.....which caused a lot of the increased demand and price for pellets.

Webmaster said:

Backstreets75 said:

Sadly.....My primary heat source is propane and that is still ALOT higher than pellets even at $300.00 a TON.

Click to expand...

If that is true, you might be getting ripped off.

LP is $1.50 in western MA.

It would take about 12 lbs of pellets to make the same BTU.

That would cost about the same price - maybe more.

Example - $300 a ton delivered - divide 2000 into 300 and we get 15 cents a pound. 12x15= $1.80

That does not take your labor and other stuff into account.......

Click to expand...

Wow, what a difference a few miles makes. I just got Propane delivered a few weeks ago... $3.30

My last deliver of 100 gallons was 2.779. that's a Ton of Warm Front Pellets. A ton of pellets lasts a lot longer that my furnace burning 100 gallons of propane.
Latest Surveyed Propane Prices
03/09/2009

Cents Per Gallon
New York Statewide 268.5
Long Island Region 294.8
Middle Hudson Region 269
Capital District Region 301.8
North Country Region 258.1
Central Region256.9
Western Region 262.3

Capital District of NYS is getting hosed by the propane companies. I hope they all have fun sitting around waiting for the phone to ring while their gas sits idly in their storage tanks. Oil - DOWN. Kero - DOWN. Natural Gas - DOWN. Propane - hardly down in comparison.

When it is time to replace my propane hot water tank, it will either be electric tank or an electric on demand system.

Besides, burning Pellets keeps some of our footprint off the grid.

I had a propane fill two weeks ago. $2.50 if paid within 10 day, $2.60 otherwise. I would never have bought a pellet stove if I were still paying $1.60 a gallon for propane.


I did some calculation this weekend based on what I've heard form by dealer and comments on this site. If propane remains in the $2.50- - $2.60 range I'll still be $400 ahead if I buy my 5 tons of pellets at $250/ton.

Given the amount of work needed to maintain the stove, is it worth $400? I'm not sure yet. The house is more comfortable than it used to be running the central heat (t-stat set @ 65 deg F averaged 900 gal of propane a year).


I think I'm going to give it another year before I make any drastic decisions. Right now I'm about half way on my ROI from the purchase of the stove. It would likely take another 4 seasons if the price differential stays at current levels.

If our far-left leaning pres. gets his Cap and Trade stuff through congress, I suspect propane will go through the roof, so we'll see.

At this moment in Pittsfield Ma. the cost of Propane is $1.69 per gal
oil is $1.87 and pellets at $3.15 per ton.
The fuel calculator reads out at :
oil.................$17.12 per mil BTU
propane ........$24.05 " " "
pellets............$26.60 " " "
Not sure of the cost of NG but it has to be lower than LP so at todays prices, at least in this area pellets aren`t looking too good.

The sad part of some areas is you cannot use stats for the area to cover all bases so to speak. For instance....their charging much less for oil in Portland Maine and even in some areas of Saco Maine and in NH than in Sanford where I live. And they wont deliver to this area at that price and the local ones are higher. So it really depends on what part of your State you are in. And its very true that even a few miles can make a big difference in what you pay.

Just checked on Propane today, $1.09 per gallon, 300 gal min. -- $1.04 per gallon, 600 gallon min. Thats in WI.

Webmaster said:

Backstreets75 said:

Sadly.....My primary heat source is propane and that is still ALOT higher than pellets even at $300.00 a TON.

Click to expand...

If that is true, you might be getting ripped off.

LP is $1.50 in western MA.

It would take about 12 lbs of pellets to make the same BTU.

That would cost about the same price - maybe more.

Example - $300 a ton delivered - divide 2000 into 300 and we get 15 cents a pound. 12x15= $1.80

That does not take your labor and other stuff into account.......

Click to expand...

Your price may very well be accurate. I don't know your source(s), but when searching I found the following:
http://tonto.eia.doe.gov/oog/info/hopu/hopu.asp. Choose your viewing method for propane. Granted these are averages with trends showing up to 3/16.
I know you give #'s and as they say, they don't lie, but I can still heat with pellets cheaper than with LP given my local pricing on both commodities. Yes there is the labor aspect to a wood appliance, but in my case, there is just no comparison to the comfort of wood heat compared to my current LP forced air system. Sometimes I believe this aspect gets over looked in the comparisons.
Who knows, maybe some of us are really getting ripped with our Lp, but I have searched and looked for these low LP prices in my area and they do not exist. Oh, I can tell you that I have been quoted lower prices to switch companies and I have done so in the past. What I have found is this usually amounts to nothing more than an "introductory" price only to see prices rise rather quickly thereafter.
On a side note concerning LP @ least what I have found in my area is that when they come to fill, they do exaclty that, always to 80%(20 for expansion). Unlike when I burned oil where I may not have sufficient funds for a total fill-up they would bring me 100 gal or whatever amount I could afford @ the time. Now obviously there were limits as to minimums they would deliver and I would take a hit on the per gal price, but I could get what I could afford @ the time. In my area this does not happen with LP. When the gas man cometh, he is going to fill 'er all the way to the top! I really miss this flexibility with oil and if I recall correctly, there are more btu's in a gal of oil than that of LP for whatever that's worth. Just an LP rant I guess!

Guys this has happened like clockwork for the past few years. Retailers offer early season specials to get customers to buy ahead. They take advantage of special pricing from manufactures and pass it along to us, the end user. Prices are as low today as they are going to be all season! In fact, you should expect to see them go up some as we get closer to peak season.


#2 pre-buy in Central / Northern Maine is 2.50 / gallon that is the same as paying $312.50 for a ton of pellets. With early season specials going on right now, you can get Maine made pellets for $235 to $255 per ton! Do the math, pellets are still much cheaper and we all know fuel isnt going to stay in the low to mid 2's per gallon for long