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U.K. Wood Pellet Imports Fall 24% after Record High Imports in H1/2016

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The U.K. is by far the largest importer of wood pellets in the world, followed by Denmark, South Korea, and Belgium. In the 2Q/16, the U.K. imported record volumes of just over two million tons, which was 11% higher than the previous quarter and 21% more than in the 2Q/15. Pellet producers in the U.S. South continue to be the major suppliers to the U.K., accounting for about 50% of total import volume in 2Q/16. The other major supplying countries are Canada and Latvia.

Monthly pellet import data to the U.K. is reported in more detail in a recent WRQ Trade Snapshot (NEW service) that is available to subscribers of the Wood Resource Quarterly, Seattle, Wash., USA.

Some of the highlights in the Snapshot include:
  • Ninety percent of all wood pellet imports to the U.K. in the 2Q/16 were shipped from only three countries, the U.S., Canada, and Latvia.
  • Import volumes in August this year fell by 24% year-over-year to the lowest level in 1.5 years.
  • Import prices have been fairly stable the past 12 months with prices for U.S. sourced pellets having been $20 - $40/ton higher than prices for pellets from other supplying regions.
Pellet manufacturers in the U.S. South have been a reliable and steadily growing supplier to the U.K. over the past five years. In 2012, the U.K. imported less than half a million tons from the U.S., and in 2016 shipments may reach more than eight times as much, according to the North American Wood Fiber Review. 

The surprise Brexit vote earlier this year to leave the EU is unlikely to impact near-term pellet exports from North America to the U.K. as supply contracts remain in place, and official negotiations regarding the EU exit process are yet to begin. However, in the longer term, the decision to stay outside of the European Union could impact policy decisions regarding bioenergy incentives with subsequent market impacts.

The North American Wood Fiber Review has tracked wood fiber markets in the U.S. and Canada for more than 20 years, and it is the only publication that includes prices for sawlogs, pulpwood, wood chips, and biomass in North America. The 36-page quarterly report includes wood market updates for 15 regions on the continent in addition to the latest export statistics for sawlogs, lumber, wood pellets, and wood chips.

 

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