Over 22 million tons of wood pellets were shipped globally in 2018, up
21% from 2017. The US, Canada, Vietnam, Latvia, and Russia, accounted
for 69% of global exports in 2018, reports the North American Wood
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 tons in 2018. A majority of the
volume is sourced from pellet manufacturers in southeastern Asia.
Global trade of wood pellets jumped more than 21% year-over-year in 2018
when a new record of 22.3 million tons was shipped, according to 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% 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 a record pace in, driven
by a European move away from fossil fuels and towards renewable energy. From the 1Q/18
to the 4Q/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, reports the NAWFR. 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 4Q/18 when import volumes reached new record highs of 339,000 tons and 993,000
tons, respectively. In 2018, the total annual import volume for the two countries was just
over 4.5 million tons, 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 4Q/18, the price for pellets imported to Japan averaged $182/ton, up almost six
percent from the 4Q/17. Pellet import prices to South Korea, which were nominally lower
than those in Japan, rose almost 25% 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.