State of the Pellet Industry

[Kenny1]

The pellet industry is still going to be volatile. Yes, new pellet mills are coming on line. However, if there is a shortage of raw material, if Europe imports most of the production, or if OPG moves its coal plants to pellets, ......

http://www.thestar.com/News/Ontario/article/574951

I think that the only thing that might stabilize the pellet market for the home user is HUGE growth. If 20-30% of homes heated with pellets, they would be more common, more readily available, etc. Even that might not do it (look at what happened with HHO in the last 12 months....).


Cheers

Kenny

 

[investor7952]

Schoondog,

the latest that I have seen is that the "experts" think oil will be at about $48/barrel in 1 year, a rise of about 20% from what it is now (approx $41).
What that means for the price of HHO I don't know....I just paid $2.54 for my first fill-up since the first week in Aug. so roughly using 20% that would mean about $3.00/ gal in my area.

If I can pre-buy pellets this spring anywhere near $250/ton, I'm going for it.

I just filled up for $2.29 my lowest this year was 2.19. 1 Last July they topped me off for 4.02 a gallon. From what Kiplinger is saying oil will average $65.00 in 09 heating oil 3.25. Pellets are still cheap in comparison even at 300 a ton

 

[boardmaker]

Another reason for raw material shortage besides closing of sawmills is because of the surge of industrial biomass boilers. They are extremely popular. In the midwest, a lot of goverment buildings and schools are being converted as we speak. I have pretty tight connections with a large boiler company that specializes in biomass. They say they can't build them fast enough. If any of you get a chance to see one in action do it. They are amazing. Like a pellet stove on super steriods. A 600HP high pressure boiler is about 10' wide, 25' long, and 25' high. Twice the size of a nat. gas boiler, do to burn box.
As far as material shortages go, they are only going to get worse unless the housing market rebounds.
Do as everyone suggests and buy plenty in the summer. You won't regret it.

 

[webbie]

heating oil 3.25. Pellets are still cheap in comparison even at 300 a ton

Not sure I would "invest" in that theory. When the capital cost, parts cost, ongoing service, labor to fuel and clean your stove and other factors are considered, there is little (if any) savings in that equation.

Of course, if you don't count your labor, your purchase of the stove, your future parts cost and many other factors it may look better - but any "investor" would surely look at those.

The general rule of thumb is move the decimal - $3.25 oil = 325 ton pellets. That $25 savings does not make them cheap in comparison.

I like the idea of $200 pellets for actual savings over oil......which are real and cover the capital costs, ongoing costs and reality of the situation.....one year ago, pellets were $200. In the midwest this year, they were that price and even less.