Europe continues to be the major destination for globally traded wood pellets. However, Asia has increased its importation of pellets over the past three years, with Japan and South Korea importing a record volume of 4.5 million tonnes in 2018.
May 3, 2019
Global trade of wood pellets jumped more than 21 percent year-over-year in 2018 when a new record of 22.3 million tonnes was shipped, as reported in the North American Wood Fiber Review. The five major pellet exporting countries (the US, Canada, Vietnam, Latvia, and Russia) have remained the top exporters for over five years. They accounted for about 69 percent of the world’s export volume in 2018.
Following the “big five” in 2018 were Estonia, Austria, Malaysia, Denmark and Germany, in descending order. Pellet production in the US South continued at record pace in, driven by a European move away from fossil fuels and towards renewable energy. From the Q1/18 to the Q4/18, exports from the region were up almost 50%, further manifesting US’s role as the world’s largest producer and exporter of wood pellets. The United States ships practically all its pellets to three countries: the United Kingdom, Belgium and Denmark. Only a small share of the pellet production in the US is consumed domestically.
Demand for imported pellets in Japan and South Korea continued a three-year growth trend in the Q4/18 when import volumes reached new record highs of 339,000 tonnes and 993,000 tonnes, respectively. In 2018, the total annual import volume for the two countries was just over 4.5 million tonnes, more than doubling in just two years. With the increased trade, prices for pellets landed in both Japan and South Korea have moved upward over the past three years.
In the Q4/18, the price for pellets imported to Japan averaged $182/tonnes, up almost six percent from the Q4/17. Pellet import prices to South Korea, which were nominally lower than those in Japan, rose almost 25 percent during the same period. The lower average cost for South Korea can be explained by that country’s reliance on pellets from low-cost countries in nearby Vietnam and Malaysia. This is unlike Japan, whose major pellet supplier is British Columbia, a more expensive producer of high-quality FSC and SFI certified pellets.
