When will the price of pellets crash?

[Chris223]

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.

Not the case anymore. Retailers are protecting margins now. They would actually rather hold onto the product until the following season now and sell at full price. The only seasonal products that get discounted are those products not coming back the following season. Also, pellets are in stock until April, and then start being received again in June. 2 months isn't much of a problem to hold onto a couple extra tons

 

[Bassmantweed]

Oil prices are dropping so that people feel like they have extra money to stimulate the economy during the Christmas season. Cletus feels because he saved$12 on his refuel that he can now go buy a $1500 big screen tv.

When he gets his credit card bill in February at@19% he will surely complain how he was unfairly treated and complain about the wealth Gap.

It's not random it's calculated. It will go back up in January.

 

[tjnamtiw]

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.

No, just another No Child Left Behind graduate. Probably a Harvard graduate!

 

[Pete Zahria]

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.

You are mixing two scenarios together.
Stores and Craigslist are not the same..
One clown trying to sell a couple of tons out of his backyard
for 12 bucks a bag isn' t the same as a store..
And comparing BBS to local dealers is also a different ballgame.

 

[CladMaster]

The only time the prices might come down is when the retailers have more stock than they expected to have due to the lack of sales, overstocked and getting close to the end of the winter season, the big box stores will want to shift them before February / March so that they have room for the spring items that will be falling of the trucks at that time, they will need the floor space to use for other items for this period. Last winter the big box stores near me stopped ordering in wood pellets at the end of January, they had two truck loads set for February and that was it for the season, 44 pallets total at one of the stores, by mid February they had no pellets to be had by anyone because they did not see that winter was going to stay until late April / early May.

 

[BrotherBart]

With some large power plants in Europe switching from coal to pellets, pellet prices on the East Coast ain't gonna crash. Just my take on it.

 

[xSpecBx]

Im sure the big box stores would rather run out early than get stuck selling stock for a discount in april

 

[mass_burner]

The wildcard here is just how low oil prices go, at certain levels it changes everything, and makes the OP question moot.

 

[SidecarFlip]

For you guys, probably never, for us out here in the modwest, next year with low corn and oil prices.

 

[Hdhogger]

With some large power plants in Europe switching from coal to pellets, pellet prices on the East Coast ain't gonna crash. Just my take on it.

BrotherBart hit the nail on the head here. Right now the pellet industry in the U.S. is reporting that 50% of production is being exported to Europe. With more pellet burning power plants being built over seas and even though more pellet mills are being built here, they are barely keeping up with demand.

 

[Peterfield]

It a darn shame they don't have trees in Europe because then they could.....never mind. We'll see I guess. I'm wondering that as Europe is making the switch from coal to pellets, will coal prices here tumble and can it to be assumed that as Europe's need for pellets increases, their capacity to mill their own pellets might also increase?

 

[F4jock]

The reason airfares won't go down is twofold: Airlines do fuel contracts in months to a year ahead of time. They largely haven't felt the price decrease yet. Second reason: Greed. As long as people keep buying tickets for their flying sardine cans and paying their fees they'll keep charging what the traffic will bear. Trucking firms ditto. In fact the greed rationale pervades humanity. Lower costs men higher profits. Excuses abound. Diesel costs - more diesel vehicles and heating oil production for instance. Pellets being shipped abroad. Phase of the moon. You name it. If you want to affect prices the cure is simple: Don't buy!

 

[Hdhogger]

It a darn shame they don't have trees in Europe because then they could.....never mind. We'll see I guess. I'm wondering that as Europe is making the switch from coal to pellets, will coal prices here tumble and can it to be assumed that as Europe's need for pellets increases, their capacity to mill their own pellets might also increase?

Russia might be the answer to this. Although these might be self igniting pellets if they're made around Chernobyl.

 

[Arti]

I think the United States is trying to get rid of Coal, This is creating a demand for other fuels so alternate energy sources are going to get a price increase.
I've been wrong before at least that is what my wife tells me.

 

[F4jock]

I think the United States is trying to get rid of Coal, This is creating a demand for other fuels so alternate energy sources are going to get a price increase.
I've been wrong before at least that is what my wife tells me.

This may stop after 1/1/15 when the new congress gets sworn in or in 2017 depending on the election results.

 

[DOLLARBILL]

Pellet prices will go down when people can heat their homes cheaper with oil and that day is coming ! I saw were they are saying oil prices will continue to be at this level or lower for at least the next two years !once the pellet inventory starts to back up you'll see prices falling or at least not going any higher !

 

[TimfromMA]

Pellet prices will drop as more people turn on their fossil fuel heat as it becomes the more economical choice.

 

[TonyVideo]

With pellet usage last year, more stove owners and demand high this year, overseas shipments is anybody monitoring the available trees in this country. I believe at least in the north the ash bore trees are being used by mills. Anybody know this?

 

[alternativeheat]

Pellet prices will drop as more people turn on their fossil fuel heat as it becomes the more economical choice.

Or pellets will go next to non existent like they did after Jimmy Carter left office after the fake oil shortage/crisis back in the 1980's ( God I'm getting old).. But ya, around here anyway, pellet stoves were a fairly new thing and for those who had bought into them it was tough getting fuel for a while. back then I had converted my boiler to coal, made my own shaker grate for it, when oil came back down to a buck a gallon that wasn't worth while anymore, so I converted it back again but with a new Becket burner. I kept the coal stove upstairs though until last year. Finally caved in to pellets, now in my 60's. I wish we had affordable and more available rice coal here, I'd have put in a coal stoker stove in the living room in a heart beat. A nice Reading stoker stove, maybe a 70,000 btu vs the 105,000 btu jobber with a convection blower. But my wife feared as another poster said, that the US is working on phasing out coal, she didn't feel secure in that investment. So here we sit with Tickle Me Elmo pellets instead.

 

[alternativeheat]

With pellet usage last year, more stove owners and demand high this year, overseas shipments is anybody monitoring the available trees in this country. I believe at least in the north the ash bore trees are being used by mills. Anybody know this?

We have heard of trees loaded on trucks going directly to mills in Maine. I have no idea the grade, but the ones I've seen do not look like lumber quality trees, too skinny. what we would call affectionately piss Oak down this way, or scrub pines which are mostly half dead wood from bogs and swampy areas... That isn't all bad, those areas can use cleaning up. You have to figure though that in Maine proper a lot of paper mills there have closed for paper production , moved to South America where there is a so called better growing season and more favorable regulations for the business. Tired of US regulators. So if native wood goes to pellet production, it was from already managed land anyway. Just my thoughts on the matter, don't ask me for quotes, I'm not that ambitious.

 

[Bioburner]

With pellet usage last year, more stove owners and demand high this year, overseas shipments is anybody monitoring the available trees in this country. I believe at least in the north the ash bore trees are being used by mills. Anybody know this?

Was a news piece about the pines around Mt.Rushmore dying of a beetle. Around 25%. Lot of trees to be harvested. Ash is a great wood for furniture and handles. Just cant transport with bark on. Was a documentary on a very nice library that got built with onsite ash trees that died of the Chinese import. In Michigan?

 

[moey]

Im sure the big box stores would rather run out early than get stuck selling stock for a discount in april

Indeed big box stores make little selling a ton of pellets. They do bring folks into the store to buy other items which have a much higher margin.

 

[bogieb]

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.

There are very few things that a retailer will take a loss on for long term. And when they do, it is called a loss leader to bring in customers that will find other things to buy. I wouldn't think of pellets would fit that category. I also find it hard to believe they are paying $7 a bag and selling them for $4.98.

Now, if you were shown "retail price", then that is the suggested price to sell it for, and the one that they will sell to individuals for - not the true cost, nor the price sold to retailers for. The mfg usually will not undercut their retailers as that is bad business for them, so they jack up the retail cost to be a good deal above what the retailers sell it for. And, it makes people think they are getting a good deal when they are shown the MSRP versus the "discount price" that the dealer will give it to them for.

 

[bogieb]

Was a news piece about the pines around Mt.Rushmore dying of a beetle. Around 25%. Lot of trees to be harvested. Ash is a great wood for furniture and handles. Just cant transport with bark on. Was a documentary on a very nice library that got built with onsite ash trees that died of the Chinese import. In Michigan?

Emerald Ash tree borer. No wood can be transported out of my county in NH, as it has been detected on the very southernmost boarder (next to MA). Nor can wood be transported in from certain states (such as MA) because most of NH is free of the pest (for now).

 

[SmokeyTheBear]

You can count on things getting aligned such as to keep the prices fairly close to what they are now. After all everyone needs their cut.