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Drop in wood pellet prices possible?

Post in 'The Pellet Mill - Pellet and Multifuel Stoves' started by Ossy, Oct 8, 2008.

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  1. Ossy

    Ossy New Member

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    Well it appears that oil prices are dropping enough to make OPEC nervous..

    http://www.ft.com/cms/s/0/417df05e-9555-11dd-aedd-000077b07658.html

    Do you think that wood pellet prices will follow shortly?....I think by Feb. that prices may drop considerably given IF the cost of oil keeps dropping....another factor will be how harsh of a winter we will have....thoughts of this?

    Ossy

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  2. Smudge88

    Smudge88 Member

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    Figures...We all have stocked up...and some burning already...I paid 295.00 a ton delivered and stacked in my garage...Is there still a shortage on Pellets?
  3. hoverfly

    hoverfly Minister of Fire

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    Have not gotten mine yet, or even filled my tank. Prices may drop, after product stacks up in the storage yard. I don't see it untill later this winter.
  4. MainePellethead

    MainePellethead Minister of Fire

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    I have bought only 35 bags. Waiting for the drop. The ones that bought early....to bad. There will be a drop..... :)
  5. dave1966

    dave1966 Member

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    i lucked out and picked up pellets in august at last years price ,come later in the season if they drop the price on em i may just get next years to be ahead of the game but if oil and prices keep droping i may just hold on to the pellets i have for next season
  6. tinkabranc

    tinkabranc Minister of Fire

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    More and more people moving toward pellet stoves this year than ever before
    so the demand for fuel will probably stay higher than past years.
    Doubt the prices will go down any time soon.
    High demand- High prices.

    I still do not understand why the Northeast pays ALOT more for pellet fuel than the rest
    of the country. I work in the transportation industry and have a hard time
    swallowing the excuse that it is due to how far away the pellet mills are.
    Most of the of the pellets available in this region are from local mills.
  7. JustWood

    JustWood Minister of Fire

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    Not likely they will drop. I'll know better by the end of Nov. how the market will play out. Supplies of raw material have been maxed out all summer. Wet weather is here now to slow or stop loggers and farmers are stocking up on bedding for the winter. 2-3 weeks of holiday mill shutdown in Nov. and Dec. All these factors are not conducive to pellet manufacturing. If anything I think prices will remain stable from where they are now and shortages will probably happen in some areas. With the economic mess going on now I am actually surprised that some sawmills are still running.
  8. GVA

    GVA Minister of Fire

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    doubtful....but maybe in February ;-)
  9. woodsman23

    woodsman23 Minister of Fire

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    Pellets here are ~230-270 a ton and i know at least 3 places that have them in stock, they are Dry Creek, Allegheny and the notorious PA pellets.
  10. CygnusX1

    CygnusX1 Feeling the Heat

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    Prices won't drop, the demand is too high and supplies are low. Simple economics.

    Until pellet manufacturers create more supply, we're stuck with high pellet prices. My guess is that in the next few years, we'll see more manufacturers come online.
  11. Xena

    Xena Minister of Fire

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    My prediction is that pellets will not drop in price.
    I also think that as the cold temps set in to stay,
    the cost of oil will go up as well.
    It's been the deal for the past 5 years so I'm expecting it this year too.
  12. slink

    slink New Member

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    I have been selling the PA pellets the last two years and have had pretty good luck with them. What issues have you had?? As for the price comming down it probably won't any time soon. Around here pellets are very scarce. I can't get them fast enough and seems as if no other dealer has any.
  13. woodsman23

    woodsman23 Minister of Fire

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    My neighbor bought a ton from Burt Young near olean and they were not the best pellets. The 1st bag we opened had a ton of fines in it. We opened another and found the same deal with that one. He ran 3 bags in his stove and the auger began to squeak. Maybe they were last years pellets (they had issues i hear). He wants 259 a ton for them. You are stoves and stuff right on 16 right? I pass you everyday going to and from work in buffalo. If you get pellets and you say they are good then i will take your word for it and send you some people. Let me know if you get some in stock and i will pass it along. I got pellets at arcade lumber last month for 209 a ton for dry creek and the home center here in franklinville got in 12 tons today.
  14. hoverfly

    hoverfly Minister of Fire

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    Personally I think people are going to adopt a wait and see approach, maybe buy minimal amounts. Oil delivery companies have there own quotas to dispense with, if they are not moving product they will lower the price, those who don't have stoves yet may fill up their tanks with the pellet money instead. At some point with this economic down turn prices will have to give on both ends. Those who stocked up on pellets may have actually paid the same price as the same cost in oil for the next few years. There for no savings, from early buying hording Vs those who have yet to buy pellets or oil. OPEC may cut quotas but it takes 6 weeks for actual product to reach the States, by the time they do that we are into the end of November and right now refineries are filled with immovable product. Where it all will bottom out nobody really knows, but even if OPEC cuts out put we really have not clue what prices will the market actually support Vs this massive bubble we had. But the price reduction is in time for up coming holiday day traveling and that is all we know for sure.
  15. slink

    slink New Member

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    I am Stoves & Stuff in Westfield NY, not related in any way to the one you pass. Seems to be a common name in the buisness. It wasn't planned, just a fluke. Last year we did see a higher amount of fines than we like but not too bad. They seem to be better this year. We are currently waiting on loads and can not take new ton orders until the waiting list is cleared out. I hate the idea of overselling and causing problems that can be avoided. We are selling ten bags at a time to walk ins. We have pinnicle pellets on the way from the west coast of Canada. They should be here with in two weeks but the cost is about $350 per ton. They are great pellets but the price reflects the long shipping distance.
  16. MainePellethead

    MainePellethead Minister of Fire

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    Demand is high yes.....but many many have already bought their supplies. And if oil goes low enough...I have talked to alot of people that will go with whichever fits their wallet. Many dealers cant afford to sit on their pellets throughout the season and not g et a return of some sort.....

    supplies are plentiful where I am
  17. MainePellethead

    MainePellethead Minister of Fire

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    Yes...true....but here in Maine this will be the first year they will be making pellets straight through the winter at THREE plants.....thats never happened. So pellets will be in great supply....watch the pallets that show up in stores in good supply soon....
  18. richg

    richg Minister of Fire

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    A frustrating situation indeed. Over the summer I was in Illinois, a state known for corn, not timber. During my travels there was corn as far as the eye could see, but the only timber around was that separating the corn fields. A hearth shop had a big sign, "Wood Pellets $160.00/ton" Tinc, the cynical side of me says that the price difference in the Northeast is pure profit and greed. I'd love to hear some silly doubletalk about why pellets are so much more expensive here than in the midwest. "Ya see, the price is due to the cost. If you take the cost, and factor in the price, you get the price cost price. Now, divide that by the cost of the price, factor in the cost, and you get the price."
  19. MainePellethead

    MainePellethead Minister of Fire

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    I have to agree to a point with ya. But I do think the reason for some of it here is they are relatively new plants here....coupled with the high transport costs....now with gas going maybe things will ease a bit. However...I was talking with Ken, the owner of Corinth Pellet Plant in Corinth Maine...my father in law knows him well. I know he has spent millions for start up costs of his plant and I am sure all of them have.....they have to recoup that cost....maybe they can get down to 200 a ton.....but I doubt they can get below that anytime soon if at all.
  20. JustWood

    JustWood Minister of Fire

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    Several factors why they are cheaper in the mid west.
    1. Very lax weight restrictions for the transportation industry in Michigan and Canada which allows cheap transportation and pellets to be injected as far south as Ill, Ind, and Oh. Google B train images. Axles from front to back!

    2. Abundance of low grade wood. Michigan and Wisconsin don't grow high quality timber. Many trees only produce one saw log and the rest is low grade. For this reason many logging companies have whole tree chipping operations where one log is salvaged and the rest is chipped and sold for boiler fuel, pellets,or paper production. You'll also find that polewood and firewood are still cheap in this region because of the abundance of low grade wood.


    3 Emerald Ash Borer. Because of transportation regulations for Ash wood in this region there is a glut of raw material(Chips) on the market. Chips from a whole tree chipping operations I'm told is the only form of Ash wood that is allowed to be transported. A friend of mine is a logger in nearby Ohio and he tells me they often get visits from USDA at the landing. If an ash log is present without a burn pile( the alternative if you don;t chip) on site they are shut down and fined.

    Although pellets are cheaper in the mid west I'd be willing to bet the quality/consistency isn't as good as other areas of the country due to many lower quality species being used in the mix.
  21. j00fek

    j00fek Feeling the Heat

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    pellet companies and their distributors will be making lots of money now that the price of diesel has come down


    they will not lower the prices
  22. jmlarson

    jmlarson New Member

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    I was at the our local Stove store 2 days ago getting some Duravent Pipe. He said they paid roughly the same price per ton this year but had to jack prices to make up for transporting fees. The cost of shipping is KILLING everyone.
  23. Catfishjack

    Catfishjack Member

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    I bought 5 tons in July..$230.00 per ton..my neighbor picked them on his flat bed..took them off with his front end loader and pushed them into my garage..I moved them with a pallet jack and was done in 30 minutes..Worked for me...I would not have found a better price..
  24. dmancine

    dmancine Member

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    I am curious as top what you are charging for the PA pellets. I just purchased a ton here in PA. for $262.
  25. richkorn

    richkorn Minister of Fire

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    I'm in SE CT. Maybe i should have gone with pelletsales or checked TSC and been done with it, but I wanted to buy local. The only place around me besides the box stores wasn't taking any orders in July. I finally placed an order in early Aug for Corinth hard wood at $269. Well, that got bumper to 280 then my order never came in and then no call. Here it is Oct and still no order. Now the supplier says he just can't get any from Corinth and his others (Lignetics, Napco...) are already gone or sold and isn't taking any more orders. I could wait for the Corinth but he can't guarantee the price that i'd have to pay or that he'll even get them.

    To make a long story short, I think i got hosed on this deal. Anyway, I went there yesterday and all he had in-stock to sell was Maine Woods (@320 (Ouuuch!)), said he's paying almost that much for them..... So I bought some and will pick them up Sat, avoid the delivery charge and be done with this "frustrating first time newbie pellet burning fiasco." The Corinth order was going to be delivered, so with this pick up (father-in-law nice enough to help with his trailer) it's still costing me about the same, except for time.

    Next April I'll order early, perhaps from Tractor Supply (pick up of course) if this supplier can't give a concrete delivery time and price.

    Hope the Maine Woods burn ok in the new stove (Leyden).

    Thanks for listening!
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