<div class="row">
<div class="col-sm-10 col-sm-offset-1">
<p>With the feed stock shifting towards lower cost fiber, including industry and forest residues, total wood costs for pellet manufacturers fell during 2016 and early 2017, according to the North American Wood Fiber Review. The PFPI price indices for the US and&nbsp;<span class="xn-location">Canada</span>&nbsp;have fallen 16 percent and 26 percent, respectively since 2013.&nbsp;</p>
</div>
</div>
<p>Wood pellet manufacturers in North America consume wood fiber from a variety of sources with different price levels, trends and cost drivers. The WRI pellet feedstock price indices for Canada and the U.S. (PFPI-US and PFPI-CA), which were launched in 2013, show a quarterly volume-weighted price for the fiber consumed by each country&rsquo;s pellet sector. Each individual facility&rsquo;s estimated mix of fiber (roundwood, sawdust, shavings, microchips, etc.) are calculated using local fiber pricing to determine a weighted price, which is further combined with production capacity and operating rate to calculate the final regional index price.</p>
<p>The price indices for both the US and Canada have trended downward the past few years and reached record lows in both countries in the 2Q/17. The PFPI-US has fallen 15 percent from its peak in the 3Q/13 to the 2Q/17. Slightly declining roundwood prices, plummeting sawdust costs, and a change in the feedstock mix towards lower cost residuals in both the Gulf States and the Atlantic States were the major reasons behind the decline in the PFPI-US Index the past year.</p>
<p>A snapshot of the various feedstocks currently being used by the U.S. export pellet sector shows 50 percent was roundwood in the 2Q/17, followed by significant volumes of sawdust and shavings, and an increasing supply of forest microchips.</p>
<p>The Canadian price index, PFPI-CA, which combines the larger Western export pellet sector primarily in BC with the smaller Eastern sector found in Ontario, Quebec, New Brunswick and Nova Scotia, has fallen more than the U.S. index (in U.S. dollar terms), mostly because of the weaker Canadian dollar. However, wood fiber costs for pellet manufacturers have also fallen slightly in Canadian dollar terms because of lower costs for logs the past few years. From its record high in early 2013 to the 2Q/17, the PFPI-CA declined 26 percent. The lower indexed price in the 2Q/17 primarily reflected the falling costs of sawdust and shavings and incremental increases in the usage of these feedstock forms over higher cost roundwood.</p>
<p>&nbsp;</p>
<p>&nbsp;</p>

2017/08/woodpelletspile2_1501623101723_largethumb.jpg

2017/08/woodpelletspile2_1501623101723_thumb.jpg

2017/08/woodpelletspile2_1501623101723.jpg

With the feed stock shifting towards lower cost fiber, including industry and forest residues, total wood costs for pellet manufacturers fell during 2016 and early 2017, according to the North American Wood Fiber Review. 

Fiber costs for North American pellet plants trend downward

Related Stories

Drax signs strategic wear parts supply agreement for North America with ANDRITZ

Report: UK wood pellet imports up 3% in 2025

NewYork GreenCloud acquires Buena Vista Biomass Power facility to launch first carbon-negative AI factory

Enpower sells 27 MW biomass power plant

EIA: Waste biomass power generation capacity expected to expand slightly in 2027

Upcoming Events

2026 International Biomass Conference & Expo

Fiber costs for North American pellet plants trend downward.css-7jxktu{position:absolute;bottom:0px;left:0px;right:0px;height:3px;border-radius:3px;background-color:var(--chakra-colors-brandBlack);}