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Any updated Pellet pricing now that we're into August?

Post in 'The Hearth Room - Wood Stoves and Fireplaces' started by PutnamJct, Aug 3, 2006.

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  1. webbie

    webbie Seasoned Moderator Staff Member

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    Where?

    Harry, has anyone done a real study on the amount of Pellets compared to the projected increase in stove sales? In other words, does anyone know what is going on? Talk about customer problems.....a lot of $3000 stoves with no fuel or fuel at 50% extra markup is not going to make for happy campers.

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  2. Michael6268

    Michael6268 Feeling the Heat

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    BT Enterprises (BT=burntime) Bristol CT.
  3. elkimmeg

    elkimmeg Guest

    So far the two largest rstove retailers wood stoves /inserts are out selling pellet stoves about 18 to 1 Last year till stock ran out all pellet stove stock sold out by Oct one and many that bought afterwards had to wait till Jan to recieve their back ordered pellet stove.

    Last years pellet shortage and the current pellet price has created a pellet stove buying backlash. On the wood stove front many have taken to scrounging early and often Or purchasing cheap last spring The ones that get into the game late will be paying quite a bit more for cord wood and probably not seasoned enough

    Not much has been said about bio logs eitherpriceing or availblity?
  4. mdphilps

    mdphilps New Member

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    Just bought a ton of Energex premium pellets for $219 in SE Pennsylvania.
  5. Retired_Ted

    Retired_Ted New Member

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    Franklin Hardware in Chambersburg PA has 'em for $211.50 per T. That's the cheapest I've seen yet around here. Most have pretty good stocks, so far. Hoping 2 T will do me. (supplemental)
  6. NWfuel

    NWfuel Minister of Fire

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    Seattle Wash. Pellets 199.50 picked up, add 100.00 for delivery
    8lb Energy logs 235.00 per 240 (pallet) picked up, 315.00 for delivery
    1 Cord 16" dry Maple delivered and dumped 357.50

    Raw materials for logs and pellets on the short side.

    I notice cord customers are increasing their orders over last year. 600 cords going fast. I would love to learn how to post you guys some pictures of 600 cords all stacked in 1/3 cord pallets at the processing yard before its gone.

    Oh ya! Super Cedar Firestarters plentiful. Kick off your Cat stove 20% faster with Super Cedar and prolong the life, (Sud Chemie 2005 letter on request) with a FREE sample of collector edition Hearth.com label email physical shipping address to forstarts@aol.com.

    Thank you for your time
    Thomas
  7. Michael6268

    Michael6268 Feeling the Heat

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    I dont burn pellets, but I still dont understand the reasoning behind the cost difference in the NorthEast vs. everywhere else, perticularly CT. Having burnt pellets in the past and remembering years ago when I bought them for 90.00 a ton, yes 90.00, I still do pay attention to the pricing, and the lowest I have seen in Central/Northern CT is 269.00 a ton. One place was chargeing 310.00 weeks ago!
  8. webbie

    webbie Seasoned Moderator Staff Member

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    As with anything else, there is a certain "fad" element in the recent rush to Pellets....certainly there are many "regular" buyers also, but my guess is that the fad is driving up sales at least 50-100% over what it might be. This also drives up the price of pellets. If buyers said "I'm not buying these at that price", well - they certainly would not sell for that price.

    CT is an interesting place and hard to get a handle on as a market. Just as NW Fuels has firewood customers at 350+ a cord (probably same in Boston or certain places on the cape), some CT customers would pay $500 a ton for pellets. For those who have not been to CT, it is a beautiful place but vast areas of it are like large (and wealthy) suburbs. Lots of NYC money flows to CT.

    I remember when CB radios were all the rage - 40 channels and you could not talk because hundreds of folks were on each channel!

    I hope alternative materials and higher ash pellets come online soon......there are a lot of mouths (pellet stoves) to feed.
  9. HarryBack

    HarryBack New Member

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    We are up 81% over same time last year in pellet sales. Stoves are up, but nowhere near as much...15%? (although thats something considering last year- I evpected a drop from last year). Part of the problem might be the "allocation" of pellets tho...up until this year, the pellet co's would allow dealers to stck up early at somewhat reduced prices. Of course, all dealers dont do this because of lack of storage space. the reason this was done was supposedly to "smooth" out the pellet inventories, make more available later in the year. WHat it seems to have done is limit supplies yet again. One supplier tells me they have extra softwood pellets, and are raising their prices because the was LESS than expected demand, and they are now having to pay warehousing fees. So, they have extra. They are upset with their dealers because the delaers committed to alot, and never took delivery (not me, by the way). Another supplier is supplying their dealers with roughtly half of their monthly allocation. The rumor is, their warehouse is empty. There are supposed to be more pellets coming into the Northeast, for instance a bagging mill in Palmer, Ma, but it likely wont be online till October. That mill is supposed to supply 80,000 tons of softwood pellets into the NE market. Thats really not much, certainly not enough to cover the stoves sold.
    What we've done this year is make a fairly large investment in pellets, both softwood and hardwood. Us New Englanders dont like to burn softwood pellets for some reason, and some are gonna "wait" for the hardwoods...a mistake, i believe. Ive burned them all....softwoods, hardwoods, premiums, standards, industrials. I dont see a big difference between soft and hardwoods on the premium level....maybe a little more deposits on the glass with softwoods, thats all. Anyways, the folks who buy stoves from us this year, we guarantee 3 tons of pelelts with the units, as long as they invoice them with the stoves. We arent guaranteeing hardwoods, just pellets...might very well be softwood. And they MUST be invoiced with the units....its the only way I can ensure the supply. I cant hold inventory back hoping folks are gonna come in. So far, its worked well. We dont sell any pellets we dont have on the ground either.....no preselling....cant rely on the allocation system...what happens if the mill breaks down or burns? That said, at the moment we are OUT of hardwood pellets, we have only Softwoods...Quality Brand, from Bristish Colombia, $239/ton. The hardwoods sell like mad. For instance, last Thursday, we received 3 t/l's of hardwoods, thats 100 tons...we were sold out of them by 10:30 Saturday. As of 4pm Saturday, we had 400 tons of softwood available....we'll see how it goes.

    50% extra markup?! wow! Who is getting that? Im not sure where folks stop buying pellets either....I know they'll pay $259/ton picked up, not alot of folks shutting down the stoves at that price...$300? who knows? We also charge for delivery, thats not included above in the $259/ton. Costs us serious cash to deliver these things....truck, driver, insurance, taxes, etc. We try to get folks to pick them up, but around half have them delivered.

    In short, no, I dont think anyone knows whats going on, both on the pellet supply side, and the how-much-will-folks-pay-before-they-burn-alternative-fuels side. I do know that most likely stove supply will outstrip pellet supply if it already hasnt. I also do know that procrastinators will always pay more if they wait...if they can even get any.....but youve heard me say that before and often. Theres a cheap time to buy fuel, and an expensive time..
  10. webbie

    webbie Seasoned Moderator Staff Member

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    Looking back into history...relatively recent - Coal was KING in 1981-1984, as folks found that the price was good compared to wood and it required less time and energy. However, when oil got cheap and stayed cheap, coal stove sales went to virtually ZERO. My guess would be a 90 to 95% reduction in the sales of these stoves.

    People were very happy with the stoves and with the heat, but when push came to shove....if oil was the same price or cheaper, the coal stove was left to die.

    Now, this is all speculation, but let's say more and more pellet stoves are sold and in a few years most are out of warranty. Then, oil comes down or stays down. Then, a combination of expensive pellets AND expensive service/parts replacement could make a certain type of customer either stop or slow their burning.

    Of couse, the same applies to wood and other fuels. But this is not far-out speculation. Maybe I am paranoid, but having lived through at least THREE of these boom-busts:

    Coal Stoves
    Pellet Stoves (early boom and bust)
    Kerosene Heaters

    I don't see where things have changed that much. In my eyes, the key is:
    #1 Pellets - good supply at good prices
    #2 Stoves - Reliable and relatively inexpensive to fix or replace parts when needed

    The point being that people will put up with one or the other not existing, but probably not both.

    Just a few short years ago, gas was virtually the entire hearth industry. Our shop was always big into wood, even if 50% of our sales were gas....but we had competitors that were 90% gas!
  11. GVA

    GVA Minister of Fire

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    Does anyone here in the northeast know if New England pellet ever opened a plant in Mass like they planned?

    I know a large part of the increase in pellet prices were due in part to higher fuel charges not just in manufacturing (extruding and drying)but in the actual shipping costs associated with bringing them to the local distributers, add to that supply and demand and we may be paying alot more for pellets than we have been used to. Are pellet stoves a fad?
    I don't really know but It seems to me That some pellet companies are trying to increase thier profits based on the trends of the markets Hopefully they will take the profits to help them increase thier production so there won't be a shortage in the future (like a couple of years ago). Lets all hope that they will not be like the big oil companies who can extract the oil from the ground and not be able to refine it, and then post record profits in the billions. Maybe I should move to Florida.

    Getting back to the point why does it cost the same for pellets that are made 70 miles from my house and pellets that are shipped from Canada.
  12. hearthtools

    hearthtools Moderator Emeritus

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    Shipping !!!!
    If you are near a mill (Washington State and Oregon) the pellets are less because the shipping is less.

    My cost of Pellet have gone up $15 per ton in 5 years.
    My cost of Shipping (FROM SAME LOCATION) has GONE UP (doubled) over $53.00 MORE per ton in the past 5 years.

    It has nothing to do with Fad (if you call pellet stoves a 20 year fad)

    I wish I could sell them cheeper.
    I dont mind seeing big box stores sell pellets cheep.
    even if it hurts my sales.
  13. HarryBack

    HarryBack New Member

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    Ill do ya one better, GVA...why does it cost me the same to get pellets from British Columbia and from 70 miles away? Conundrum, huh?
  14. GVA

    GVA Minister of Fire

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    I'm sorry for any confusion on the subject.
    Last year local news stations here in the northeast were telling everyone to buy a pellet stove... Well things went nutty
    I couldn't get pellets in august and was told next shipments were in october..
    Prices went from 199 a ton to in many cases over 300 a ton
    I paid 320 for one of my five tons last year and hope that does not happen again
    One dealer in May of 06' wanted $358 per ton and said the days of $200 a ton are over......
    This is what I meant by Fad
    So many more people were buying pellet stoves last year the pellet companies couldn't keep up in the early part of the season.
    I just hope the pellet companies can keep up with the estimated demands this year or we are all gonna be cold this winter.

    So yes in a way I hope what happened last year is just a fad everything calms down in the future.
  15. HarryBack

    HarryBack New Member

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    I dont think they can yet GVA....not enough increase in production to cover this year and last years' stoves.
  16. HarryBack

    HarryBack New Member

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    heres a fuel calculator that might help you folks here.......

    http://www.pelletheat.org/3/residential/compareFuel.cfm

    I have no idea what gas sells for, but I do with oil....$2.40 today, pellets around $239-$259/ton.....plug em in.
  17. vgrund

    vgrund Feeling the Heat

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    I suppose you could count me as someone who was keen to jump into pellets, but timing allowed me to recognize the market dynamics and as a result I thought better of it. I'm still looking at two open masonry fireplaces and wondering what to do. All I know for sure is that pellets aren't a great choice given the economics in southern New Hampshire. Pellets are running $280/ton at our local Harmon dealer, and let's not forget the kilobuck investment to get started. It's not likely to improve soon and I'm not about to start following "pellet pricing" threads at the level of interest of an owner. High ash is of interest and most useful to central heating folks and those with full (non-insert) stoves. Last year I procastinated by improving energy efficiency and I'll likely do more of the same this year. Perhaps next year I'll add an old-fashioned, non-pellet wood insert in our family room. I'm toying with the idea of a gas insert in the lessor used living room. We're on LP here, which is atrocious, but I'm not sure I want to deal with two wood burners.

    Victor
  18. webbie

    webbie Seasoned Moderator Staff Member

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    RE: The calculator at Pellet heat.....

    Plugged in 299 a ton for Pellets (that is the delivered price, it seems) and lowered the efficiency to 75%, because no way these products have AFLUE of 87% as the default is listed there. 75 is a high number and probably a good number.

    Plugged in current fuel oil price, as an example - in Portland, ME. About $2.30 cash delivered.
    http://maineoil.com/

    Given those prices, pellets are about 15% more than oil.

    Anyway you want to look at it, it is close - prices vary by locales, but in the eastern seaboard most will find the fuels either identical or so close as not to make a financial difference.
  19. smirnov3

    smirnov3 Feeling the Heat

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    You forgot to put in the disclaimer that you are comparing direct vent / area heaters, NOT pellet stoves to oil central heating systems (where you have to factor in the efficiency of the heat transfer system).
  20. BrotherBart

    BrotherBart Hearth.com LLC Mid-Atlantic Division Staff Member

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    While natural gas is at a twenty month low and oil is headed down.
  21. webbie

    webbie Seasoned Moderator Staff Member

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    You are exactly the customer type I was referring to. Someone who does their homework and is not listening to the chatter that says "I heat my house with "X" tons of pellets", but actually comparing fuels and appliances....including up front costs.

    Heck, the work on the house (conservation) is the best possible investment you can make.

    I agree about keeping two woodstoves going. That leave you with either keeping one empty, or installing LP or Pellets.

    With either of those fuels, the price will not matter as much for occassional use. When it get you is when you run it for many hours a day. How much is LP gas?

    LP contains about 100,000 BTU per gallon, which means one gallon is equal to about 12.5 lbs of pellets.
    or roughly 3 gallons for a 40 lb bag of pellets.

    So, LP at $2.00 a gallon is close to Pellets at $299 (delivered) - the LP may be a 5-10% more per BTU, but when you figure in the hauling of the bags, removing ash, etc. we can call it equal.....So it all depends on what you can get LP for.
  22. webbie

    webbie Seasoned Moderator Staff Member

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    This does not apply, because you can buy oil or LP freestanding space heaters.....
    We are just comparing BTU to BTU.....you can have pellet and corn central heaters and you can have oil or electric space heaters.

    So, there is no disagreement about the potential savings of space heat, closing off rooms, being cooler in certain parts of the house, and basking in the glow of the fire with your love.

    BTW, a well designed central heating system in a well designed house is quite efficient. Same with cooling. I'll take central air any day over a bunch of window units running 24/7.

    Since most modern furnaces and boilers are 84-92% efficient, the only question is where the heat goes. Certainly some heats the basement - but a lot of people want that. Proper zoning can go a long way toward making certain heat is delivered where it needs to be.

    Central heating is a GREAT idea, and I would never want to go too far backward.

    Ah, that give me an even better idea about efficient space heat - We each wear a space suit type thing with a tiny Pellet Burner located in it. We could burn just a handful of pellets and stay warm for hours in our little "space". Using Harrys pellets, we could probably get by with about 12 pellets per day. The result would be that customer would pay much more for pellets since they stretch so far!
  23. Mike Wilson

    Mike Wilson New Member

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    Put the Bong down Craig...

    -- Mike
  24. HarryBack

    HarryBack New Member

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    and the fact that you are conveniently picking lower pricing on oil and higher pricing on pellets to further skew the comparison......

    http://www.newenglandoil.com/mass.htm

    pick an area, average the cost, you dont get $2.30/gal ANYWHERE in New England.....
    most pellet dealers dont get a per ton delivery charge either, rather a per delivery charge.....for instance, 3 tons plus over 15 miles one way is $65.00 TOTAL, not per ton......
    now, being charitable and giving the oil 80% efficiency and pellets 80% as well, figuring on oil averaging a much more realistic $2.55/gal, and pellets averaging a more realistic $279/ton (delivered), and that same calculator puts oil more expensive....go figure.

    http://www.pelletheat.org/3/residential/compareFuel.cfm

    I cant predict what oil is going to cost this winter. Will it stay low or will it increase? The thing is, the pellet folk will have "locked in" their winter fuel prices by buying their winters worth early (most do, rather than buy a ton at a time). Possibly a more realistic comparison might be to compare this winter's retail oil futures prices, where the folks "lock in" their oil prices all winter? The number for that here is $2.699/gal....lets see if that makes a difference....that works out to around $3.00/Million btu's more expensive for oil. Obviously, burning oil is much more convenient than pellets as well....just let the oilman fill the tank, no work involved, rather than stacking the pellets wherever you have to...Im not sure what the nuisance factor is there tho.
  25. PutnamJct

    PutnamJct Member

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    Oil is not available today for $2.30 cash delivered in lower NY. Try $2.59 - $2.69 per gallon. Pellets at $299 a ton is at the exteme high end of the game and you can get them closer to $240 a ton (which is still high) . Using your numbers you are totally setting up the calculator to skew towards oil. Your numbers may be accurate in Maine, but not down here.
    The day oil drops to $2.30 or less a gallon and I'm buying pellets at $300 a ton, the stove gets unplugged.

    From the calculator:
    Wood Pellets
    Cost per ton in dollars
    $239
    Appliance Efficiency €
    Cost per million BTU=$18.22

    Fuel Oil #2
    Cost per gallon in dollars
    $2.69
    Appliance Efficiency €
    Cost per million BTU=$24.37

    Electricity
    Cost per kWh in cents
    ¢13
    Appliance Efficiency €
    Cost per million BTU=$47.63
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