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pellets > $400 per ton. seems like a shortage

Post in 'The Pellet Mill - Pellet and Multifuel Stoves' started by dccampli, Sep 7, 2008.

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  1. dccampli

    dccampli New Member

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    Called them back in June but thought that price was already too high thinking they were taking advantage of the situation. After speaking with the department manager at Lowes shortly after, was convinced Lowes would have plenty at a good price. That was big mistake.

    Currently liwoodpellets.com is $395/ton plus $90 delivery for 4 tons+tax=$454 each. Might have to revise the subject to >450.
    Even at these prices could still see some cost saving vs oil at 4.50 or higher so maybe pellets could go even higher.

    Now I know for next season.

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  2. Bxpellet

    Bxpellet Feeling the Heat

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    He quoted me $325.00 but as of the next week they would be $350.00, I went to my stove store and got them for $305.00 but I have to pick them up, they won't cross the Bronx line, There is a stove shop in Aminityville (not sure I spelled that correct) did you try there?
  3. Xena

    Xena Minister of Fire

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    Holy chit. All I can say is, I'm glad I don't live on LI
    and thank heavens for pellesales.com for bringing
    my goods early at a reasonable price.

    Oh, and a little fyi: I hover around 97F so if
    I'm 98.6 I am not feeling well.
  4. drizler

    drizler Minister of Fire

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    Yikes, thats just plain nuts. I will happily put up with the cold ass never ending winter way up to the North before I would ever pay those prices. Of course if you need delivery they further have you by the short and curleys to boot. Good reason to keep either a trailer or an old beater truck. For that price I would do some serious importing...................
  5. bostonbaked

    bostonbaked Member

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  6. sebagobio

    sebagobio New Member

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    Southern maine
    I agree with mkmh, that everyone is buying at the same time due to the price of oil. I bought my 6 tons in late June or early July at $204 a ton from Lowes. Lowes was selling them at $289/ton, but Sam's club was selling them at $204/ton and Lowes had to match it. New factories are coming online in early 2009 and should drive the price down. Hopefully there is enough sawdust to cover all of the pellets for our needs
    lol
  7. novah

    novah Member

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    I don't agree there is no such thing as gouging. Unfortunately for consumers, there are some items that have forced demand and that opens the door to gouging because while you can go somewhere else, the price is still too high. Maybe monopoly would be a better word than gouging but there is no doubt we are being taken advantage of.

    Lobsters are 4.99 a pound right now and everytime I go to the store I see people with them in their carriages. If they go to 9.99 a pound, you won't see anyone buying them because they don't need them. You can't do that with heating oil, pellets, gasoline, electricity. When everyone is selling necessary commodities at an inflated price and you need it to live, you have to find a way to pay the price.
  8. Valhalla

    Valhalla Minister of Fire

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    Essex County, New York
    Market demand and supply will determine the price. Better to buy in the spring and then stock up. Try to have a friend and you order a truck load and store in a dry place; barn, garage, shed, public storage...

    Buy wisely.
  9. JustWood

    JustWood Minister of Fire

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    Arrow Bridge,NY
    No one has to HAVE pellets. IT IS NOT ANYONES GOD GIVEN RIGHT TO HAVE CHEAP PELLETS. Burn wood,coal ,corn or natural gas. You subject yourself to market forces by not being prepared (why didn't you buy your pellets late last winter or spring when they were cheap?) or having options such as other fuel types or the means to pickup your own pellets and save a few bucks.

    Lobsters are $16/lb in the retail stores here and that is the frozen price, not fresh. It's the price we have to pay for being so far inland. Supply and demand ,NOT gouging.
  10. webbie

    webbie Seasoned Moderator Staff Member

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    Not to be repetative or cynical, but I have heard the "new factories" line a LOT since 1993....... I think the experts will have to do some number crunching to weigh the stove sales (and total stoves installed) against the output of the plants.

    If a lot of people start using boilers, that is gonna up the ante real fast....10 tons a year instead of 2-4 (in most freestanders)...of course, they are getting more of the job done too, but it still uses more pellets.

    Right as we speak, oil is coming down fast while pellet are at their high for the year. I assume something will give.
  11. webbie

    webbie Seasoned Moderator Staff Member

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    Well, I'm getting gouged on my:
    health care
    property taxes
    food
    electricity
    and much more......

    Luckily, my natural gas is still cheap - but only one vendor there.

    I think gouging is just an opinion....except there are certain laws against, for instance, bringing a bunch of portable generators down after a hurricane in Florida and selling them for 4x the price. Personally, I don't agree with those laws........if a hard working citizen wants to pack his van up with goods and drive down there, they should be able to sell for anything they want - as long as they have the license (business, sales taxes, etc.) to do so.

    I know a LOT of people that sell pellets, firewood and stoves...and I can rightly claim than very few of them have made as much money as a 2nd year Wall Street Salesman. If they ain't getting rich, they ain't gouging (and even if they are getting rich, they may not be).....

    Fact is, we buy Frosted Flakes for $3.50, when it contains less than 25 cents worth of ingredients.
  12. DiggerJim

    DiggerJim Feeling the Heat

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    Northcentral Connecticut
    And Starbucks cost more per gallon than gasoline...and there's still a line there every morning :)
  13. GVA

    GVA Minister of Fire

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    Waxhaw, NC... Formerly North shore Mass
    and I still don't believe what any pellet mill says........
    That's like trusting OPEC on the amount and cost of oil....
    If oil keeps going down= pellet surplus
    if oil jumps back up= pellet shortage...
    you gotta believe that the mills are ramping down production due to the falling oil price.......
  14. MainePellethead

    MainePellethead Minister of Fire

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    As I posted with another post......a couple weeks ago I had breakfast with a mill owner in the northern part of Maine. They are just adding a third shift. They are right out straight.....the owner was going to give us a tour(he is friends with my father in law).....but we didnt have time but we drove by and this was on a Sunday....and he had much activity going on. Has weekend shifts going. He just recently added machinery($$$) that will accomodate grinding whole logs and is starting those real soon if he hasnt already. He is using chips at the time along with sawdust. The place is very active and wants to hire a few more around the mill. My guess is.....that he is supplying Les Otten which has started advertising for pellet boilers in maine along with pellet delivery. Course he wouldnt tell me that. I 'm not sure if some of their pellets are leaving the country....but anyway......I know they are pumping out very large amounts. And the other plant in Maine(Athens) is very busy as well. I think the pellet market in Maine will be healthy for some time....providing they save some for our State and not send them all over the place.
  15. gw2kpro

    gw2kpro New Member

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    Central Maine
    Correct. There's no such thing as price gouging in the current pellet market. If the guy selling them for $400 has buyers, he'll get $400.

    If he can't get $400, he'll reduce his price to $375. If he can't get that, he'll reduce it to $325. And so on.

    The market price for pellets is set by consumers and will be as high as people are wiling to spend.
  16. imacman

    imacman Guest

    I agree 100%.....if people buy them, price increase, and vice-versa......it's called economics.
  17. novah

    novah Member

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    Loc:
    Milton, NH
    [quote author="LEES WOOD-CO" date="1220992298

    No one has to HAVE pellets. IT IS NOT ANYONES GOD GIVEN RIGHT TO HAVE CHEAP PELLETS. Burn wood,coal ,corn or natural gas. You subject yourself to market forces by not being prepared (why didn't you buy your pellets late last winter or spring when they were cheap?) or having options such as other fuel types or the means to pickup your own pellets and save a few bucks.

    Lobsters are $16/lb in the retail stores here and that is the frozen price, not fresh. It's the price we have to pay for being so far inland. Supply and demand ,NOT gouging.[/quote]

    Well then I guess the demand went up while everyone was sleeping last night because the gas stations near my house went up 3 to 5 cents per gallon. If I had not learned about the new rules for supply and demand on this forum, I would have thought it was because the morning news said Ike was going to hit between Houston and Corpus Cristi and MIGHT cause the refineries to shut down. I capitalized might because it seems like all the big price increases have happened because there might be a shortage. The supply has never been compromised but the price had been inflated because of investors concern that there may be a shortage.

    In actuality, demand did not increase last night nor did the supply go down but the price has gone way up. If Ike was to veer off and not do any damage at all, the price is still inflated and the public has to pay more, at least in the short term. What has all this to do with pellets? NOTHING but if the gas goes up and the oil goes up, the pellets will go up. Not because of reduced supply. Not because of increased demand. It goes up because they own the pellets and decide make increase prices like the other sources of heating material. What is the result, increase profits.

    Take a look at this AP news article this afternoon:

    <Quote>
    Sep 11, 3:50 PM (ET)

    By MADLEN READ

    NEW YORK (AP) - Gasoline prices jumped to unprecedented levels in the wholesale markets Thursday as Hurricane Ike tore across the Gulf of Mexico, threatening to strike Texas and its refineries.
    Crude oil on the futures market, however, sank below $101 a barrel to its lowest settlement price since late March - a sign that
    investors are still worried about waning global demand.
    <End Quote>

    Notice that the investors are driving the prices, not the consumer! Not supply and demand!

    If supply and demand was driving the market, we would not be seeing increased prices due to projected and often non-materializing supply shortages. Text book supply and demand is logical but the energy markets are not following it. That is why we feel there is gouging going on.
  18. JustWood

    JustWood Minister of Fire

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    Well then I guess the demand went up while everyone was sleeping last night because the gas stations near my house went up 3 to 5 cents per gallon. If I had not learned about the new rules for supply and demand on this forum, I would have thought it was because the morning news said Ike was going to hit between Houston and Corpus Cristi and MIGHT cause the refineries to shut down. I capitalized might because it seems like all the big price increases have happened because there might be a shortage. The supply has never been compromised but the price had been inflated because of investors concern that there may be a shortage.

    In actuality, demand did not increase last night nor did the supply go down but the price has gone way up. If Ike was to veer off and not do any damage at all, the price is still inflated and the public has to pay more, at least in the short term. What has all this to do with pellets? NOTHING but if the gas goes up and the oil goes up, the pellets will go up. Not because of reduced supply. Not because of increased demand. It goes up because they own the pellets and decide make increase prices like the other sources of heating material. What is the result, increase profits.

    Take a look at this AP news article this afternoon:

    <Quote>
    Sep 11, 3:50 PM (ET)

    By MADLEN READ

    NEW YORK (AP) - Gasoline prices jumped to unprecedented levels in the wholesale markets Thursday as Hurricane Ike tore across the Gulf of Mexico, threatening to strike Texas and its refineries.
    Crude oil on the futures market, however, sank below $101 a barrel to its lowest settlement price since late March - a sign that
    investors are still worried about waning global demand.
    <End Quote>

    Notice that the investors are driving the prices, not the consumer! Not supply and demand!

    If supply and demand was driving the market, we would not be seeing increased prices due to projected and often non-materializing supply shortages. Text book supply and demand is logical but the energy markets are not following it. That is why we feel there is gouging going on.[/quote]

    Another case of unpreparedness. EVERYONE north of the equator has known for the last 7-10 days that Ike and a plethora of other storms and hurricanes to follow are on their way. I guess that if I lived in the gulf region that on or around August 15 I would stock up on 100 or more gallons of gas so as not to be affected by supply and demand.

    I don't suppose there are any volunteers that are willing to go down to the Gulf and drive a tanker full of gas from a refinery to a gas station just before or during a hurricane. I'm sure they (tanker drivers) are home battoning down the hatches or out of the area with their family. THUS the supply issue.
  19. novah

    novah Member

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    Loc:
    Milton, NH
    [quote author="LEES WOOD-CO" date="1220992298

    No one has to HAVE pellets. IT IS NOT ANYONES GOD GIVEN RIGHT TO HAVE CHEAP PELLETS. Burn wood,coal ,corn or natural gas. You subject yourself to market forces by not being prepared (why didn't you buy your pellets late last winter or spring when they were cheap?) or having options such as other fuel types or the means to pickup your own pellets and save a few bucks.

    Lobsters are $16/lb in the retail stores here and that is the frozen price, not fresh. It's the price we have to pay for being so far inland. Supply and demand ,NOT gouging.[/quote]

    And to address your other questions, I didn't buy my pellets last winter because I was struggling to pay for my fuel oil. Having options for other fuel types - I have all the same options as everyone else. And, they have all gone up. It has nothing to do with being prepared as there are no energy options that have not felt the affects of the hedge funds using the energy sector for profit.

    Why do you think the energy sector was targeted? Because we are a captive audience, because can't say we won't buy energy and because we have limited options and exercising those options cost money. I was fortunate enough to get a tax return that covered the cost of my stove this April and the 1200 dollars my wife and I got from the government stimulus checks bought the pellets (which I did pick up myself) but I am sure there are plenty of people who would like to go the pellet route but just don't have the money. They are stuck where they are and can't exercise the available options.
  20. JustWood

    JustWood Minister of Fire

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    And to address your other questions, I didn't buy my pellets last winter because I was struggling to pay for my fuel oil. Having options for other fuel types - I have all the same options as everyone else. And, they have all gone up. It has nothing to do with being prepared as there are no energy options that have not felt the affects of the hedge funds using the energy sector for profit.

    Why do you think the energy sector was targeted? Because we are a captive audience, because can't say we won't buy energy and because we have limited options and exercising those options cost money. I was fortunate enough to get a tax return that covered the cost of my stove this April and the 1200 dollars my wife and I got from the government stimulus checks bought the pellets (which I did pick up myself) but I am sure there are plenty of people who would like to go the pellet route but just don't have the money. They are stuck where they are and can't exercise the available options.[/quote]

    Sounds like you are prepared if you bought your stove in April which got you in the game before the price increases on stoves and pellets.
  21. ugenetoo

    ugenetoo New Member

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    northern maine
    you got to be ready to burn anything!
    lobster has been cheap this summer, so i say lets burn lobster!!
  22. Panhandler

    Panhandler Minister of Fire

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    Gas Price Gouging Hits Hurricane States
    Officials Are Instituting Emergency Anti-Price Gouging Laws in Their States
    By CHARLES HERMAN, ZUNAIRA ZAKI and SCOTT MAYEROWITZ
    Sept. 12, 2008—


    As Hurricane Ike barrels down on Texas, the impact is being felt in other parts of the country as the oil industry comes to a near halt and reports of price gouging start to spread.

    Fears of gas shortages are leading to exploitation in some parts of the Southeast where some stations are reported to be charging as much as $6 a gallon for gas.

    In North Carolina, Gov. Mike Easley has declared a state of "abnormal market disruption" and signed an order allowing the attorney general to enforce the state's anti-gouging law. In South Carolina, Attorney General Henry McMaster invoked a similar law for his state, and Kentucky Gov. Steve Beshear declared a state of emergency.

    "Fear of price gouging is bad in the state right now," Mark Plowden, communications director for the South Carolina attorney general told ABC News. "Public panic can cause a run on the pump, creating more panic, so we are trying to control the situation."

    His office has fielded hundreds of phone calls, and many other calls have been received by county law enforcement offices. Plowden added that the receptionist is fielding "a phone call every eight seconds on this topic."

    "People have gone as far as calling 911 to report that gas is expensive," he said.

    How Are You Dealing With Gas Prices? Tell ABC News.

    South Carolina passed its law on price gouging in response to Hurricanes Katrina and Rita. Those hurricanes severely disrupted the oil pipeline that supplied oil to the area.

    In the Columbia, S.C., area, some stations have been reportedly charging more than $5 with at least one report of gas selling for $5.59. In Tallahassee, Fla., there was a report of gas at $6 a gallon. Prices have also spiked in Kentucky and Virginia with reports of gas priced at $4.50 and $4.79, respectively.

    In New Bern, N.C., one station raised its prices today from $3.98 a gallon to $4.98.

    Gas in the mid-Atlantic and southern-Atlantic states was averaging just $3.60 last week, according to the Department of Energy.

    Making matters worse, 97 percent of oil operations in the Gulf of Mexico have been temporarily halted. On average, more than 1.3 million barrels a day are produced in the Gulf. Natural gas production has also come to a near halt, with 93 percent of those facilities shut down, according to the Department of Energy.

    "You already have supplies tighter already because of Gustav," said John Kingston, director of oil for Platts News & Pricing, an industry research service. "Now real fears, not only shut down, but some refiners could flood and cause significant delays in refiners being damaged or flooded or power out for a week."

    But even the oil that is already out of the ground is no longer being turned into gasoline. So far, 13 refineries in Texas have shut down or slowed down operations from Port Arthur to Houston to Corpus Christi.

    These refineries can handle 3.6 million barrels a day of crude oil, which represents 75 percent of the total refining capacity in Texas. The state leads the nation in refining, representing more than one-fourth of the country's total refining capacity.

    There are also going to be major delays in moving oil from one location to another. Major crude oil pipelines have been shut down throughout Texas and Louisiana. These pipelines deliver oil and gasoline to the Gulf Coast region as well as up and down the Eastern seaboard.

    That means less oil, and gasoline will be available to gas stations. which, in turn, means reduced supplies. That can lead to higher prices, especially if drivers start filling up, worried about possible shortages.

    The explanation for the increases at the pump can be blamed on higher wholesale gasoline prices in the areas directly affected by Hurricane Ike. On Thursday, wholesale gasoline rose nearly around $1.50 -- more than 40 percent -- in one day, the biggest one-day spike since the Arab oil embargo in 1973, said John Kilduff of MF Global. If those wholesale prices were to hold, Kilduff said the price at the pump could rise to $5.25.

    Oil settled at $101.18, up 31 cents, at the end of trading today. Earlier in the day during trading, oil sold for $99.99. The last time oil traded below $100 was May 2, and the time oil settled below the nice, round figure of $100 was March 4.

    Gasoline inventories in the U.S. are at an eight-year low, and a major disruption to the nation's gasoline supply could send prices soaring immediately, even if oil prices continue to drop.

    "Oil prices and gas prices used to be much more in lock step and they separated last couple of years," said Jeff Leonard of the National Association of Convenience Stores. "They reflect each other, think biggest schism seen."

    Ben Brockwell, director of data, pricing and information services for the Oil Price Information Service, told The Associated Press: "The path of the storm has put the entire supply chain under stress from the refinery level all the way to the retail station level. Hopefully, it's a temporary phenomenon, but we won't know until next week."
  23. JustWood

    JustWood Minister of Fire

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    WELL!!! If Chuck,Zunaira,and Scott say it's so, then it must be! SORRY, I was wrong all along.
  24. novah

    novah Member

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    This discussion turned to the topic of gouging and whether or not it is happening. I posted that the gas stations in my area had increased their prices by 3-5 cents per gallon just on the news that Ike was approaching Houston and there were going to be serious repercussions. Nothing had taken place yet but the anticipation was there.

    These same stations had added 10 more cents per gallon this afternoon on the way home. 15 cents per gallon increase in roughly 24 hours. How can that not be gouging when the impact of the hurricane has not been felt anywhere near this area?

    Years ago, the price increase didn't hit the consumer until the next delivery. Today, the prices jumps as soon as the internet reports there is a situation, real or anticipated.
  25. Panhandler

    Panhandler Minister of Fire

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    WELL!!! If Chuck,Zunaira,and Scott say it’s so, then it must be! SORRY, I was wrong all along.

    _------------------------------------------------------------------------------------------------------------------------------------------------

    Or maybe a state government.

    http://abcnews.go.com/Business/story?id=5791480&page=1
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