Pellet prices are "not" dropping in NE

kinsman stoves said:

And then you have to remember CASH helps.

Eric

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Yes, that is true for a number of reasons, some of which I won't go into.

sinnian said:

rayttt said:

the price of pellets is not due to greed...
as has been said here numerous times..it is in fact supply and demand..
and the fuel prices cause suppy in costs and ups the cost to run the machinery..
and the biggest cost of making pellets is (according to newp) the cost of electricity
to (most likely for drying) and thats generated usually by diesel fuels also..
when the winters over...there will be a glut of pellets available ..since they are producing
hard still id imagine...
and alot of us have ours already..people will buy and run oil now in alot of cases because its cheaper.

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Sorry, but that is naive.

There is not a shortage of pellets in Maine, just too high of prices. Therefore it is NOT supply and demand. Additionally, according to the Maine Pellet Fuels Association electricity is only 12% of the cost of producing wood pellets, nor is the wood supply a factor in Maine. Then what is the answer?

PA may be different, but in Maine there is no reason for $300+ / ton pellets with 3 mills in Maine and NEWP and others right next door.

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I couldn't agree more. It's greed, and opportunity.
Mike -

Doubtful it's greed.
Don't know the percentage but a substantial portion of New Englands (north east USA) pellet production is shipped a stones throw away to Europe where biomass markets are far more developed than here in the US. I just read about a power plant that recently came online somewhere in Europe that consumes many thousands of tons of pellets per day.

LEES WOOD-CO said:

Doubtful it's greed.
Don't know the percentage but a substantial portion of New Englands (north east USA) pellet production is shipped a stones throw away to Europe where biomass markets are far more developed than here in the US. I just read about a power plant that recently came online somewhere in Europe that consumes many thousands of tons of pellets per day.

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North America's production of wood pellets is only a small percentage of the companies that supply Europe's wood pellets. Granted there are pellets going overseas there, but of the 127 posts for companies selling pellets in Europe that I found here, only 7 were from North America.

It is true that pellets are going elsewhere, but since we are still in the infancy of consuming wood pellets in North America there is enough supply. According to the Canadian Wood Pellet Industry of the projected 2,225,000 million tons of pellets expected to be produced in Canada in 2009, 675,000 tons will stay in North America. As, our pellet consumption grows in North America, more and more pellets will stay here.

There will always be wood pellets shipped overseas, this is due to that there are a number of wood pellet producers that are owned and operated by European companies to supply some of Europe's demand.

Thus far in Maine, there is no major and cost effective way to ship wood pellets overseas, thus according the Corinth Pellets, 70% of what they manufacture stays in Maine. Therefore prices should not be $300+ per ton. However, if they continue to be, any foothold on the North American domestic pellet consumption will be lost. Wood pellet producers will weather it due to Europe's consumption, but the dealers will be SOL if they keep up the cost per ton.

As far as I can tell the problem isn't greed or some conspiratorial "pellet industry" but just a crappy haphazard distribution network - yes, in its infancy for something that only recently caught on in the US. If half the stores weren't sold out, and if people weren't getting ripped off when they pre-ordered, and there were more than a handful of easy to use websites delivering pellets to yr door.... Then people who aren't cruising hearth.com all day long wouldn't be buying pellets at my local hardware store for $7.49. They're basically paying for the luxury of having them in stock. (The garden supply store across the street can't keep pellets in stock for some reason, neither can area Lowes / HD.) *shrug*

And that $7.49 at the local hardware is a buck fifty more than Wal-Mart - in line with other goods, and I doubt the two got together in advance to agree to price gouge pellets. If there's evidence of anyone actually making large profits in the pellet biz, I'd love to hear who it is, exactly.

http://www.ncloggers.com/Documents/Biomass Articles/Articles from Southern Loggin - Running List of Biomass etc.pdf

http://alachuapost.com/Features/4109.html

If exporting to europe from the south is profitable then it surely is from NE.
Competition with power plants for raw product will become an issue in the future for pellet manufacturers as they require a clean and sized specific material. The equipment to process this spec product is very cost prohibitive unless the price of pellets remain high. Power plants don't require such a tight spec or clean material and the equipment to produce such material is considerably less of a capital investment.
You have to remember also that Europe has experienced high energy prices for a long time and the value of the dollar makes it feasible to import biomass/pellets.

http://polarbearandco.com/mainedem/pel.html

http://business.mainetoday.com/news/070415woodpellets.html


This is a quote from the 3rd article. "Corinth Wood Pellets anticipates that about 70 percent of the pellets will be shipped to European markets."

Skunk said:

And that $7.49 at the local hardware is a buck fifty more than Wal-Mart

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If that doesn't reek of greed I don't know what does? Opinions vary I suppose.
I think Lees signature is spot-on. Roosevelt was a smart man, and the "get-rich-quick theory of life" may just be the problem.

Mike -

LEES WOOD-CO said:

http://polarbearandco.com/mainedem/pel.html

This is a quote from the 3rd article. "Corinth Wood Pellets anticipates that about 70 percent of the pellets will be shipped to European markets."

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Well I am no math wiz, but my article said 70% would stay in Maine, your article said 70% would go to Europe, which obviously does not add up :grrr:

I checked with a supplier just across the border in Canada and I can get bulk pellets for $199 p/ton delivered. I will be building my bin very soon!

hi andrew what supplier or brand is that you are talking about? $6.99 a bag right now in nova scotia, canada

This is bulk pellets and not bagged pellets. It's Clarke et Fils LTEE in Sherbrooke, QC I don't know the brand.

Wet1 said:

I still won't pay $250 a ton, although that's getting closer to being more reasonable. Until prices get back to around $200 a ton, I'm not buying any more. I would hope the majority of you will not be supporting this $300 price point either.

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I live in Holyoke mass and natural gas is .83 per whatever and is way cheaper than heating with 300.00 per ton pellets. It's dumb to pay that much for pellets but if people are willing to pay that much go for it. If they don't go way down I'll just get a ton for supplement heat when i want it. This year I heated exclusively with pellets but they were 220.00/ton. Places that were charging up to 359.00 a ton this year I hope they got stuck with them. Makes you wish you didn't buy a pellet stove! Kinda disgusted with this talk about pellet prices staying up. They can keep them.

Hey Sharkbait, what's Mc Kinney getting for NEWPs these days? I heard 300 and that they came down to 285 bucks in Feb. That's a long way from the 230 he was getting just a year ago. The dealers are hung because they bought last year when prices were high. They'd be upside down if they sold them any cheaper than what they are asking now. BUT... what about what's being shipped now?
Price is artificially high IMO. I don't know. I agree, buying them right now for any more than 250 bucks is nuts. But I see people buying them. I don't get it.
Oh well, I'm covered for the next couple years, so f&$# 'em and feed em beans.

Not sure what he's getting ,but diesil fuel is down a couple bucks so they can't blame it on shipping cost. It's always something. Now with the tax credit more people are going to buy pellet stoves not knowing it cost more to heat with since pellet prices so high. What's the insentive to buy preseason? If pellets are going to be 350.00 later on , I'm definetly not buying any. And it's not worth it now at the going price plus delivery! I don't see other energy prices going up anytime soon IMO.

56 chevtruck said:

hi andrew what supplier or brand is that you are talking about? $6.99 a bag right now in nova scotia, canada

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$6.99??? I am going back to heat with electricity at that price. WTF!