I am expecting a huge drop in the price of pellets. With the cost of oil down 40% we should see a big decline in pellets. Just the cost of transporting pellets has gone way down since most are shipped by truck. And also if oil prices drop any further (another 20 percent) the savings you get from a pellet stove is not worth the effort it takes to run it. It's much easier to put on the boiler. Any thoughts?
When will the price of pellets crash?
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We can all dream. I was hoping the cost of an airline ticket would go down but that hasn't happened.
Won't happen. People are buying pellets like they are going out of style even with the current ridiculous prices. Pellet manufacturers and retailers enjoy the extra margin they are making, and with the high demand why would they lower the prices? If I were in that business, I sure wouldn't, unless there was a reason to. Business is about profit, and the more the better, so make hay while the sun shines.
alternativeheat
Minister of Fire
I liked your post even though we have discussed this quite a lot lately. I personally would expect a stable price first since any pellet orders right now for this season are pretty well already in the works. A drop would be nice. A crash in price is unlikely for this year IMO. Next is another matter all together but then we have overseas demands on our raw materials. We have lots of pellets of a lower quality than the home owner uses going over seas.
As to next year, lets see if oil holds or not. Some suggest it will surge back up, this is an unknown.
I agree - was hoping propane would follow oil prices down, but doesn't look like that has been happening. I would be surprised if we dont see some decrease, maybe to 2013 pre-pay levels before the panic set in. This year is in the books price wise, next year we can hope for the best..
alternativeheat
Minister of Fire
I don't know how propane fits into the fracking scheme. I do know that due to fracking we have a whole bunch of crude oil we didn't have before that is being transported to Texas and Canada for refining and distributed from there. This is all by rail. Something on the order of 1,000,000 barrels a day coming out of ND. But who knows what is going to happen with the refined stuff, pass it on to us or ship it on out of the country. and at what point does propane happen ? I have no idea but I know I pay a hell of lot for it. In this area, maybe more than anyone on this board.
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Electric rates are up specially in the northeast. Pellet production uses a lot of electricity. There were days last summer where pellet places in the northeast were losing money making pellets because of electric rates on certain days when demand was high. Transportation is a small cost in pellet production.
alternativeheat
Minister of Fire
tiger
Feeling the Heat
Cost go down? I'd settle for availability going up! 
I need to look very closely at diesel costs, I thought that was staying high while gasoline declined.
I need to look very closely at diesel costs, I thought that was staying high while gasoline declined.
Diesel is higher than gas here too which is BS. Around $3.75 gal. Diesel used to always be .30 to .40 cents a gallon cheaper per gallon in years past. Now its flipped that and more above gas.
I wouldn't hold your breath on anything energy related. It's a big game! A conspiracy, I tell ya
! LOL! You know what they say. Wish in one hand and s**t in the other and see which one fills up first. BTW have you seen prices on food and goods drop because the trucking oil is cheaper............ Me neither. Ticks me off too.
I wouldn't hold your breath on anything energy related. It's a big game! A conspiracy, I tell ya
! LOL! You know what they say. Wish in one hand and s**t in the other and see which one fills up first. BTW have you seen prices on food and goods drop because the trucking oil is cheaper............ Me neither. Ticks me off too.
CladMaster
Minister of Fire
This takes a month or two before you see a drop in airline tickets. They are always a month or two behind.
Most Airlines lock in their fuel prices for a period of time (hedge), some 6 months, some 1 year, some 5 years etc. Given that most are probably locked in at a higher than market price currently. It will be awhile till we see costs come down on tickets, if ever given how tight flight capacity is
(broken link removed to http://www.dallasnews.com/business/airline-industry/20140716-american-airlines-dumps-its-fuel-hedges--and-saves.ece)
(broken link removed to http://www.dallasnews.com/business/airline-industry/20140716-american-airlines-dumps-its-fuel-hedges--and-saves.ece)
Drop in pellet prices??? hahahaha
That will NEVER happen as long as people are rushing about to buy their 'Super Premium Platinum Palladium Organic Odorless Gluten Free Pellets' for $400 a ton because they are 'hotter'. Look at the prices people were willing to pay for ONE bag last winter and ask yourself why pellet producers are not ashamed to ask crazy prices for pellets. It called Free Market Capitalism. Welcome to America. Enjoy it while it lasts!
That will NEVER happen as long as people are rushing about to buy their 'Super Premium Platinum Palladium Organic Odorless Gluten Free Pellets' for $400 a ton because they are 'hotter'. Look at the prices people were willing to pay for ONE bag last winter and ask yourself why pellet producers are not ashamed to ask crazy prices for pellets. It called Free Market Capitalism. Welcome to America. Enjoy it while it lasts!
The Coopers
Member
Peterfield
Minister of Fire
It's starting to happen now. I've noticed Craigslist ads spiking in the past few days with prices at or below their purchase prices. The excuses are great, such as I bought too much, don't have room, my stove broke, my stove doesn't like these pellets, I switched to blah, blah, blah, etc. We are getting close to Christmas and these entrepreneurs, for lack of a better word, are starting to sweat. Not going to make the killing they thought ($10-12 a bag) and mama needs a new pair of shoes. Loving it. I was going to buy my last ton this week but seeing this, I'm waiting a bit. Santa is coming early this year.
I don't think the pricing from CL 'entrepreneurs' is what anyone is talking about or worrying about as far as price fluctuations. I'd burn my furniture before handing one of those dbags a nickel.
Peterfield
Minister of Fire
I would heat with oil before buying from a fleabag either - let them swim in them this summer. I just meant I have noticed several ads, all selling pellets at a good price, around $4.00 - $4.40 a bag. My thought is we're getting to a point where everyone is securing their supply for the heating season and the big drought in pellets didn't occur (in most areas) and they are not going to be able to take advantage of that nor do they want to hold them all next year. It's going to take longer for the stores to realize they are going to be stuck with stock and have to lower their prices. That I haven't noticed yet.
LOL. I just checked CL for giggles. Check out this little gem of a sentence:
condition: new
Are Pellets Stove Broke down that why need to sell pellet $5.00 A Bag ( I Have 42 Bags)
English as a second language, apparently.
bogieb
Minister of Fire
I saw those same ads. Unfortunately the cost of gas to get there and/or the cost to rent a van to haul a full ton, doesn't make it cost effective for me to get anything off CL. I was really tempted by the FSU's at 4.25/bag because my St. Croix really seems to like those shorter pellets - but figured out the gas cost and I would break even to what I spend at HD for the same stuff (not to mention 1.5 hours round trip and I would only safely carry 15 bags in my Jeep at that distance). HD and WM prices in the Manchester area have stayed stable so at this point it is fine for me to grab 5 bags during my lunch once a week or so.
Also, still had a little over a ton pre-paid at a local place. Just picked up 20 bags today, leaving 40 bags for later. I was heartened to see that they had a lot more pellets than they have had in the past (they have grumbled before when I took 20 bags - or last year limited to 5 bags per customer).
I really liked the guy who bought 4 tons but won't use at least 2 tons of it this year. Hell, I've already been thru a ton (pellets have supplied all heat this year), so you are right Peterfield, that guy was hoping for another pellet shortage and to score a killing.
Bioburner
Moderator
When Russia gives it's Natural gas back to Europe. The warming trend here helps not shrink the fuel pile too. Just read about two pellet plants being constructed down south for export.
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Pete Zahria
Minister of Fire
You probably won't notice it either...
If you are expecting to see dealers lower their prices by a bunch,
you're dreamin'.......
And to think that someone is going to make a killing on selling two tons...
Really? What do you call a killing? If he sold a $260 ton for $300?
That's a lot of work and gas to make about 80 bucks..
Disneyworld here we come...
Dan
Peterfield
Minister of Fire
How about a seller who will sell you North American pellets for $10 a bag. He was nice enough to come down from his last ad of $12 a bag. I was ready to jump at this bargain, except that TSC has them for $5.19 bag and I picked up a few to try. I'll wait for his BOGO offer in a few weeks.
Peterfield
Minister of Fire
The stores will not want to be stuck with overstock, just like they unload patio furniture in the fall on sale. It's just a seasonal commodity to them. May not happen but since there are almost 600 tons of pellets available today within a 20 mile radius (Lowe's, HD, TSC, etc.), I'll just be picking up bags when I'm in the area. No lines, no waiting.
Retailers aren't enjoying any margin on pellets lol. Pellets are basically sold at cost. And when we hit a shortage and the prices spiked a few months ago I was shown our costs... Where I work they're being sold at a loss now, $2 per bag. Not really sure why you would think retailers spiked the price to make a bigger margin.
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