Survey: COVID-19 impacts raw material availability for pellets

By Hawkins Wright | May 18, 2020

The results of a survey by Hawkins Wright found 58 percent of wood pellet producers felt COVID-19 was negatively impacting their business, but only 33 percent reported that they had reduced production as a result.

The survey, open from 29 April to 14 May, aimed to gather data on the current and expected future impact of the COVID-19 pandemic on global wood pellet supply chains. It found reduced sawmill availability was impacting the greatest number of producers. Eight-two percent of producers negatively affected by COVID-19, reported some affect. Almost 14 percent felt severely affected.

The regional impact of sawmill residue availability was evident in the results. The current ample supply of raw materials in Europe meant 33 percent of European companies negatively affected by COVID-19, did not feel affected by reduced sawmill residue availability, whereas all those in North America and South East Asia felt affected to varying degrees. (It is important to note not all SE Asian or North American participants felt negatively affected by COVID-19.)

The survey also revealed reduced end-user demand beyond the seasonal norm was having an effect. 73 percent of those negatively impacted by COVID-19 felt reduced end-user demand was affecting them.

Participants expect that raw material costs, specifically due to reduced sawmill residue availability, will rise. However, most (68 percent of producers) expect those cost increases to be less than 10 percent. As a result, several producers are planning to reduce their use of sawmill residues in 2020, using more roundwood and in-wood chips and other fibre instead. Forty-eight percent of respondents to the survey think that the peak in raw material costs will be seen in the next 3-6 months.

Hawkins Wright received over 40 responses to its survey, representing over 15Mt/y of pellet production capacity, equivalent to around 30 percent of global wood pellet capacity. Producers from all regions were represented, with a mix of residential and industrial-grade producers.

To purchase the report presenting the results for US$100 (GBP£80) please visit https://www.hawkinswright.com/bioenergy/covid19-survey. All the revenues that are raised from the sale of this report will be donated by Hawkins Wright to the international medical charity Médecins sans Frontières (MSF).