Had a chat today with one of the principals (Jon) of Pelletsales.com.
As I mentioned before, they are not a back-of-the-store operation, an expanded stove dealer, garden center, etc.
They are a well capitalized business with dozens of employees who have invested a LOT of resources, time and money and intend to become the largest broker of pellets in the USA...in fact they probably already are. I'm not saying this as an advertisement, just trying to communicate that they know what they are talking about in this market.
The good news. They have pellets.
The bad news - they see the supply of pellets continuing to be tight and the price continuing to be high - in the Northeast. Demand has outstripped supply, which means pellets must be hauled in from as far away as British Columbia (by train) and then transferred and hauled a few more times before getting to the end user. Given the higher fuel costs, you can imagine why the prices have skyrocketed.
I inquired as to why pellets were less money in the midwest and ohio - and even W. Pennsylvania. Jon had not heard this, as he see a lot of demand coming from there....for pellets at much higher prices than I have heard about. We guessed that the lower priced pellets are spotty - the result of smaller mills and dealers who made deals for supply before the craziness hit. In other words, if you see something good - grab it. It might not happen again soon!
Pelletsales.com sees supply increasing as the season winds down. They seem to think that a big problem this year was NOT the lack of plants (although that figures in), but rather the fact that the existing plants did not build up big inventories in the months before the "crisis" hit - in other words, given the poor year for pellet appliances last year, the mills were not taking any chances. By the time the boom hit, it was too late to build up stock - everything they make is flying out the door.
Even with lower oil prices they do not expect pellet availability to increase soon - because too many pellet appliances are being built and delivered in the months ahead. Sure, these new owners may not burn as many (if oil is cheap), but most will buy at least 2 tons of fuel along with their appliances.
Anyway, that's a quick summary of the state of the market in New England!
As I mentioned before, they are not a back-of-the-store operation, an expanded stove dealer, garden center, etc.
They are a well capitalized business with dozens of employees who have invested a LOT of resources, time and money and intend to become the largest broker of pellets in the USA...in fact they probably already are. I'm not saying this as an advertisement, just trying to communicate that they know what they are talking about in this market.
The good news. They have pellets.
The bad news - they see the supply of pellets continuing to be tight and the price continuing to be high - in the Northeast. Demand has outstripped supply, which means pellets must be hauled in from as far away as British Columbia (by train) and then transferred and hauled a few more times before getting to the end user. Given the higher fuel costs, you can imagine why the prices have skyrocketed.
I inquired as to why pellets were less money in the midwest and ohio - and even W. Pennsylvania. Jon had not heard this, as he see a lot of demand coming from there....for pellets at much higher prices than I have heard about. We guessed that the lower priced pellets are spotty - the result of smaller mills and dealers who made deals for supply before the craziness hit. In other words, if you see something good - grab it. It might not happen again soon!
Pelletsales.com sees supply increasing as the season winds down. They seem to think that a big problem this year was NOT the lack of plants (although that figures in), but rather the fact that the existing plants did not build up big inventories in the months before the "crisis" hit - in other words, given the poor year for pellet appliances last year, the mills were not taking any chances. By the time the boom hit, it was too late to build up stock - everything they make is flying out the door.
Even with lower oil prices they do not expect pellet availability to increase soon - because too many pellet appliances are being built and delivered in the months ahead. Sure, these new owners may not burn as many (if oil is cheap), but most will buy at least 2 tons of fuel along with their appliances.
Anyway, that's a quick summary of the state of the market in New England!
