Historical prices for delivered pellets

 Historical prices for delivered pellets

FutureMetrics has estimated the historical delivered (CIF) price of wood pellets from international trade data. The value and quantity of imported pellets reflects the actual prices that buyers are paying for the fuel. Most pellets are traded under long-term contracts. Some pellets (probably less than 15 per cent of total trade) are traded on the spot market.

Argus reports the weekly spot price of pellets. However, the spot price is quite volatile compared to the overall prices paid for imported pellets because the spot price reflects short-term supply and demand imbalances. If the market is in a state of excess supply, prices fall. If the market in a state of excess demand, prices rise. Since the spot market is a small portion of overall pellet trade, supply and demand imbalances have amplified impacts on the spot market. Long-term off-take agreement prices are stable and change only due to the terms of the contract. Below is the Argus spot price history.

FutureMetrics’ estimates for CIF prices and market shares by major suppliers for Japan, and South Korea are below. Note that monthly data is somewhat volatile in part due to how the data is gathered and the number of shipment per month for any given month. The trade weighted average price and the trend lines help to see through the volatility. Even with those issues, the estimated pellet prices are far less volatile on a three-month rolling average than the spot prices.

Future pellet prices?

The price of pellets will be heavily influenced by long-term contracts for wood pellets. In fact, as noted above, the volatility of the spot market increases because majority of the market is under long-term contract. Since such a large percentage of the market is already under long-term take-or-pay contracts, when the market is in periods of excess demand or excess supply, the majority of the market correction has to take place within the 10-20 per cent of the total market that is traded on spot. In the long run, the contract price and spot price should converge around a market equilibrium price.

The intrinsic costs of producing and delivering pellets, including typical profit margins, will set the market prices for long-run supply contracts.Many of the forecast model’s modules use oil prices as a significant source of cost uncertainty. Harvesting and transporting wood to pellet mills, conversion to pellets, transport logistics by truck, rail, and ship, all contain a significant exposure to petroleum costs (such as diesel and bunker fuels). FutureMetrics utilizes the United States Energy Information Administration’s (EIA) forecast for oil prices (West Texas Intermediate or WTI). The chart below shows the EIA forecast (in nominal U.S. dollars assuming two per cent annual inflation) for oil prices and the forecast range of where actual prices may be.

Historical pellet ocean shipping freight rates provide insight into the expected long-term market clearing rates for typical-sized vessels from various pellet export terminals. FutureMetrics does not try to forecast the short- to medium-term drivers of shipping cost volatility.

The methodology of estimating expected future CIF prices involves developing independent forecasts for each of the main components of pellet costs:

• Wood costs delivered to the pellet mill

• Pellet mill conversion costs (excluding wood costs)

• Pellet producers’ expected margins (using EBITDA per tonne as the model input)

• Inland transportation from the mill to the port, and port storage and loading costs

• Shipping

The Korean consortium, represented by the CEO of GIMCO, signed a cooperation (MoU) with the Ministry of Health, PDTT (and PT Alam Bumi Cemerlang), to utilize waste / corn cobs (3500-4500kCal / kg) (in 24 districts) into wood pellets to be converted into village electricity in Transmigration area, Labangka, Sumbawa, NTB. The weevil will be mixed with Gamal trees (4168kCal / kg, 24% moisture content, 2.97% ash content) and Kaliandra (5000Ha) to be used as wood pellets and exported to South Korea to fuel South Korean PLTBm. An investment of USD400 million was also planted to fund a 400,000 ton / year wood pellet factory and a 30MW PLTBm in Sumbawa.

Sawdust, rice / wheat straw, rice husks (3300kcal / kg), bagasse / bagasse (containing 2.5% sugar, 1.825kCal caloric value), corn stalks / sorghum, leaf litter, grass, twigs, Palm EFB (tankos oil palm), and plant parts that have been considered waste can be a source of WP. WP business actors have started to plant fast-harvesting wood that has minimal maintenance and high energy content as a mixture of these wastes. For example: Chinese petai (Leucaena leucocephala), red calliandra (KM) (Caliandra calothyrsus), and Gamal (Gliricidia sepium). The purpose of making WP is that the calorific value of the wood waste is to be increased so that it becomes BB with calories close to coal (5,000 - 6,000 kCal), which is around 4,200 - 4,800 kCal with an ash content of around 0.5-3%.

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Wood Pellet is the favorite fuel

 Wood Pellet (Wood Pellet, WP) is currently the favorite fuel (BB), especially in a country that has 4 seasons as a substitute fuel for coal (partially / completely) in coal-fired power plants, heating, biomass stoves, and drying in laundry services. Meanwhile, the marketing of taxpayers in the country is regulated on a one-package model with a stove or burner for household use (a substitute for LPG), food processing factories such as chicken, tofu, warm Jogja, restaurants / food stalls, tea / tobacco / tobacco drying stoves. corn / fish, fried food entrepreneur, etc.

The high demand for taxpayers in foreign countries is due to the fact that coal export destination countries (South Korea, Japan, China and India) are slowly shifting to good quality, environmentally friendly, and renewable taxpayers (as evidenced by the rapidly increasing demand for wood pellets in the international market). On the other hand, China has also gradually started banning the use of (low calorie) coal for its citizens (due to pollution and high sulfur emissions). Australia and the US are minimizing coal use. Indonesia is also slowly replacing the use of coal with wood pellets. (SNI 8021: 2014).

Reference coal price chart

source:https://www.minerba.esdm.go.id/harga_acuan

 

The increase in coal prices due to the 2016 tightening of production, caused the Indonesian Reference Coal Price (HBA) in the international market (November 2016) to begin to creep up to US $ 84.89 / ton previously, (October 2016) US $ 69.07 / ton, even breaking through USD100 / ton in December 2016, namely to US $ 101.69 / ton. In 2018, the HBA can be seen in the image (6322kcal / kg, FOB vessel). DN production in 2020 was around 485 million tons, fulfillment of DN (DMO, Domestic Market Obligation) 114 million tons, export quota of around 371 million tons.

On the other hand, around 50 companies partnered with PT PJB to build a mine mouth power plant (MT) (total 6GW) with sub-critical environmentally friendly technology on their boilers in order to reduce the number of exports (which in turn would raise prices) as well as accelerate the 35,000 electric power realization program. MW. Example: PLTU MT Jambi (2x300MW); Riau (2x300MW); South Sumatra 1, 6 (2x300MW, Tanjung Enim, 3 million tonnes of coal / year, 2026), 8 (2x260MW, Huadian Bukit Asam Power 45% + China Huadian 55%, Muara Enim, 5.4 million tonnes of coal / year); Kaselteng 3, 4, 5; Kaltim 3, 5 (200MW), 6, Muara Jawa; and United Tractors (2x15MW, Kalteng).

 One of the uses of coal is converting it into syngas (synthetic gas) through gasification technology (plasma gasification) to convert syngas into electricity, or other substances such as methanol, DME, ammonia, etc.

There are several reasons coal will be blown away by wood pellets:

•        Wood pellets are renewable (always present, and can replace coal in the future), and are environmentally friendly, while coal is non-renewable (exhausted) and less environmentally friendly. Therefore, the use of coal at the international level is gradually decreasing. So, there is an opportunity to increase the national electricity supply via BB wood pellets.

•        Wood pellet calories are equivalent to low coal calories.

•        Lower carbon production than coal.

•        The cost of electricity produced by coal-substituted wood pellets is the same as that produced by natural gas, which of course is cheaper than coal.

•        More staff required for the wood pellet power plant (including the preparation of wood pellet infrastructure) (increasing employment), namely around 3,480 people, while the coal power plant with the same power requires a staff of around 2,540 people.

•        The long-term demand for sustainable wood pellets motivates stakeholders to conserve and improve forest management, as well as develop critical land (ex-coal mines, gold, tin, nickel, etc.) into industrial forest plantations specifically for wood pellets (for example Kaliandra Merah wood (KM ), Mahang / Macaranga Gigantean, Karamunting / Melastoma Malabatricum)

•        Demand for wood pellets from all over the world continues to arrive in Indonesia. This should be used to increase people's income

•        Indonesia is actually capable of producing ~ 49.8 GW of biomass electricity (Indonesia only needs an additional 35 GW of national electricity). Indonesia's biomass potential is around 146.7 million tonnes / year from rice residue (150GJ / year), rubber wood (120 GJ / year), sugar residue (78 GJ / year), palm oil residue (67 GJ / year), and other organic waste (20GJ / yr).

As shown in the chart, future demand in the UK and EU is expected to plateau by 2021. However, major growth is expected in Japan2 and South Korea until 2024. From 2010 to 2025, the average annual increase in demand for industrial wood pellets is estimated at about 2.3 million metric tonnes per year.

 

This forecast, as noted above, is under current policy. Policies are likely to evolve as the impacts of climate change accelerate. FutureMetrics expects even the U.S. to have a policy for carbon emissions reduction by the mid-2020s. Using pellets as a coal substitute in utility- scale pulverized coal power stations has been proven to be a reliable and economical solution for lowering CO2 emissions

Although the countries that use WP are able to produce themselves, they are still not able to meet the needs of their WP DN (must be imported), because timber growth in sub-tropical countries is slower than in tropical countries.

World WP production is close to 28 million tonnes (2015, for heat 15 million, industry 13 million). Meanwhile, global WP marketing for electricity and heat generation continues to grow at around 14.1% per year. In 2020, the demand for taxpayers is estimated to soar to 80 million tons.

Since 2012, South Korea has targeted the use of Renewable Energy to be at least 2%, and in 2022 the use of biomass must enter 10%, of which 60% comes from WP. In February 2015, the South Korean market needed to supply more than 280,000 tons for household needs and the food & beverage industry. About 70.3% of South Korean WP are imported pellets (Indonesia only supplies> 6,2% to South Korea, to be precise about 8,940 tons from 122,447 tons in 2018, and the rest is imported from Russia, Thailand, Canada, Malaysia, and Vietnam).

At that time, Indonesia's CIF WP price was the cheapest (US $ 131 / ton, below Vietnam's US $ 144 / ton, and Malaysia's US $ 141 / ton). Imports from Indonesia were continued with the presence of the South Korean company Depian Co. Ltd. with state-owned company PT Inhutani III (developing 5000-8000Ha industrial plantations in Pelaihari, South Kalimantan via PT SL Agri to export WPs of up to 100,000 tons, 2015). In the future, several South Korean companies have explored the possibility to import WP from Australia, Vietnam, Indonesia, the Philippines, Malaysia, Thailand, Canada and the US. South Korea requires its PLTU to use WP.

South Korea itself imports WP at a price of around (109-135) Euro / ton (2015). At that time, Vietnam had exported around 63,8 % of WP to South Korea.

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Capacity 25.000 Tonnes/Month (Consortium Manufacturer) bejayawoodpellet@gmail.com

 Bejaya Wood Pellet is a Indonesian Company, We are Wood Pellets manufacturer's distributor outlet who source materials from local and Indonesia products. The global wood pellet industry has grown exponentially with. 

In recent years Indonesian has started to see the light and we are happy to be a part of a fast moving market which we believe will have a long term and sustainable part to play in our future energy mix. 

Wood pellets are generally made from waste biomass products such as sawdust, tree pruning’s or grass clippings. A pellet mill is used to compact the waste biomass into an incredibly dense fuel source. Our pledge to you is to supply top quality pellets using only ethically sourced biomass. 

Capacity 25.000 Tonnes/Month (Consortium Manufacturer) 

Price & Order: phone: +81283285838 

email: bejayawoodpellet@gmail.com 

Branch Office: JL.Taman Heleconia Raya, 

Block HO.2 No.20, Tarumajaya, Harapan Indah, Bekasi West Java Indonesia 

PT. Bestari Anugerah Jaya Orchard Square Gos.C.02, 

Kelapa Hybrida Raya, North Jakarta, 

Indonesia sales@bejaya.com 

Manufacturers ;

Lamongan Surabaya Wonosobo Semarang

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Bejaya Wood Pellet, Price & Order: phone: +81283285838

Bejaya Wood Pellet is a Indonesian Company, We are Wood Pellets manufacturer's distributor outlet who source materials from local and Indonesia products. The global wood pellet industry has grown exponentially with. 

In recent years Indonesian has started to see the light and we are happy to be a part of a fast moving market which we believe will have a long term and sustainable part to play in our future energy mix. 

Wood pellets are generally made from waste biomass products such as sawdust, tree pruning’s or grass clippings. A pellet mill is used to compact the waste biomass into an incredibly dense fuel source. Our pledge to you is to supply top quality pellets using only ethically sourced biomass. 

Capacity 25.000 Tonnes/Month (Consortium Manufacturer) 

Price & Order: phone: +81283285838 

email: bejayawoodpellet@gmail.com 

Branch Office: JL.Taman Heleconia Raya, 

Block HO.2 No.20, Tarumajaya, Harapan Indah, Bekasi West Java Indonesia 

PT. Bestari Anugerah Jaya Orchard Square Gos.C.02, 

Kelapa Hybrida Raya, North Jakarta, 

Indonesia sales@bejaya.com 

Manufacturers ;

Lamongan Surabaya Wonosobo Semarang

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Benefit Analysis of the project

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Vast Oversea Market

 

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Development of Pellet Equipment

 

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Domestic Policy Support

 

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Relatively intensive production Circle

 

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Plywood manufacturing process

 

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Advantages and Feasibility of the Project & Abundant Raw Materials Potential in Plywood Manufactures

 3.Advantages and Feasibility of the Project

Plywood manufacturers have more potentials to develop wood pellets. This project has shown many advantages and feasibility on developing wood pellet in Indonesian plywood industries.

3.1          Abundant Raw Materials Potential in Plywood Manufactures

Relying on the rich forest and cheap labor resources, there is a rapid development on Indonesia’s timber industry, especially plywood and furniture manufacturing based on raw materials such as logs and saw timbers. And these are increasing year by year. Among them, plywood industry has become a major part of Indonesian economy.

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The investment of wood pellet production line

 

The investment of wood pellet production line can better deal with the waste problem of wood factories.

It can recycle the wastes to produce new alternative energy - wood pellets. 

This production line have several advantages: a clear division of labor, complete support equipment, high degree of automation, high productivity and convenient operation. 

In addition, this production line can be operated only by six persons. It adopts three-tier structure dryer new technology, which is more effective than single-layer; equips with flue gas filtration equipment to reduce pollution; adds a more effective control system.

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Biomass Fuel Program

 

Biomass fuel program has become an important part of world sustainable development strategies and it can provide a win-win solution for the government: low prices can reduce energy use costs; reduce carbon emissions to honor their commitments to the Kyoto Protocol; reduce the dependence on oil country which is distant, political instability and still dangerous; it is conducive to energy security.

Increasing demand for biomass, the pellet industries are rapidly developed all over the world. With abundant forest resources, cheap labors and vast oversea markets, Indonesia has great potential to develop wood pellet fuel industry. Indonesia has the second large number of plywood manufacturers in the world. Also, Indonesia is the world’s largest plywood exporter.

The wood plants generate a tremendous amount of wood waste every year. Development of wood pellet fuel can help reduce the impact of these wastes on the carrying capacity of environment in Indonesia, also helps to reduce waste and promote income-generating efficiency of Indonesian

 

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EXPORT WOOD PELLET: TO JAPAN OR KOREA?

 EXPORT WOOD PELLET: TO JAPAN OR KOREA?

Market aspect is an important factor for production, including wood pellets. The introduction of the characteristics of a good market will also determine the success of marketing the product. Korea and Japan are the two biggest wood pellet markets at this time, so a number of export-oriented producers are trying to fill the market. The wood pellet market for Europe is generally not a priority, this is because a large capacity is required for delivery there, for example 40,000 - 60,000 tonnes / shipment, which wood pellet producers in Indonesia cannot yet fulfill because their production capacity is still small. Almost all of the wood pellets shipped to Korea and Japan from Indonesia also still used containers, because the volume was not large.

What are the differences in the wood pellet market between Japan and Korea? Then, why do Indonesian wood pellet producers need to consider this? The use of wood pellets for power plants in both Japan and Korea is policy driven, namely Renewable Portfolio Standard (RPS) in Korea and Feed in Tariff (FIT) in Japan. But also how the mechanism of supplying wood pellets in the two countries is different. Japanese buyers prefer long-term contracts with fixed prices, wood pellet producers are also included in the sustainability criteria (for example, proven by FSC), good forest management practices and stable macroeconomic conditions. Meanwhile, Korean buyers prefer cheap wood pellet prices in "open markets" with short-term contracts.

Facing the above market conditions is of course also different. The Korean market is considered easier and prices always follow the market, but with this condition wood pellet producers are competing to increase their efficiency so that the selling price of pellets can be cheap and accepted by the Korean market. This is evident from wood pellet manufacturers in Vietnam, namely with a low price strategy, it has proven to be the main supplier of wood pellets in Korea.

However, along with limited raw materials and rising oil prices, the price will be corrected according to these conditions. Meanwhile, the Japanese market demands in-depth study and very thorough preparation, so that only large manufacturers can do it. Fixed prices, long contracts and large volumes also risk causing losses to producers, if inflation occurs in the producing countries because the feed in tariff (FIT) policy is set for a period of 20 years. This also needs to be anticipated by wood pellet producers if they want to enter the market. Japan.

Biomass fuels account for a 4.3% share of Japan in their 2030 energy projection. This means that biomass accounts for 4.3%

Biomass fuels account for a 4.3% share of Japan in their 2030 energy projection. This means that biomass accounts for 4.3% of 245 million MW per year with renewable energy or around 6,000 MW from biomass. To reach this capacity, it takes approximately 22.2 million tons of wood pellets per year. Currently most of the wood pellets imported from Japan come from Canada.

Of the 374,000 tonnes of wood pellets imported by Japan in 2016, around 75% came from Canada. Meanwhile in 2017, wood pellets imported from Canada fell to around 65%, then Vietnam filled quite a lot in that year, followed by China. Canada tries to keep maintaining its market share in Japan because it feels capable of meeting the requirements. The 20-year long contract under the FIT mechanism is also considered more attractive than the Canadian medium supply contract to Europe, such as with Drax in the UK for 11 years, for example in 2020 they started a contract, then in 2040 the new contract ended or Japan became a wood pellet product offtaker for 20 years. In addition, the wood business and processing factors from Canada, which have been running for a long time, are also used to strengthen the market share of wood pellets in Japan. On the other hand, Indonesia's wood pellet exports to Japan are still very small.

Most of Indonesia's wood pellets are exported to Korea, which is estimated according to Global Trade Atlas Data at 63,000 tonnes in 2014 and fluctuates slightly to 61,500 tonnes in 2015. Since implementing RPS (Renewable Portfolio Standard) in 2012, Korea is committed to increasing the use of renewable energy in particular. biomass and more specifically wood pellets in the energy sector. Based on the RPS, Korea requires coal-fired power plants to use a minimum of 2% renewable energy in 2012, with an increase of 0.5% / year until 2020. By 2020 they will need a minimum of 10% renewable energy with a composition expected that 60% of renewable energy comes from wood biomass. , while the remaining 40% comes from other sources and it is estimated that wood pellets will be more than 10 million tonnes.

WHY ARE MOST OF THE WOOD PELLETS PRODUCED BY INDONESIA EXPORTED TO KOREA?

There are several factors that influence this, namely the requirements for exporting wood pellets to Korea are not as strict as Japan, most Indonesian wood pellet producers have small capacities with limited raw materials so that they are more suitable for short-term contracts and prices offered by Indonesian wood pellet producers. can compete with other producers such as Vietnam, Thailand and Malaysia. Wood pellet is basically a new product for the energy sector, so the problem of dynamic prices in the "open market" or the international market, apart from supply-demand factors, also energy prices in general are very influential, especially oil.

Indonesia, although currently still does not have a large market share or it has not been calculated in this sector, the potential is very large. Tropical climatic factors, vast and fertile land are extraordinary basic assets to become a biomass producer. In addition, with a location closer to the market or user country than Canada, it is also an advantage. If the rate of interest on Indonesian deposits is eliminated or at least reduced, the level of passion for doing business will also be a tremendous driving force. Do not let the application of high deposit rates backfire, which is a disaster, one of which is being late in innovating in the bioeconomy era, even though the resources are abundant.

Several Indonesian wood pellet producers such as the South Pacific in Jepara and Singpellet in West Sumatra also have the concept of energy gardens for the production of wood pellets with fast rotation crops (Short Rotation Coppice / SRC). Wood pellet production from energy plantations is the best scenario to enter / penetrate the Japanese and Korean wood pellet markets. To design a large capacity wood pellet production from energy gardens, you can read it here. The Muslim bioeconomy model with the integration of wood pellet production from energy gardens, sheep farming which is the best treasure of Muslims and honey bee farming, will excel and become a major player in the bioeconomy era.

Bejaya Wood Pellet is a Indonesian Company, We are Wood Pellets manufacturer's distributor outlet who source materials from local and Indonesia products. The global wood pellet industry has grown exponentially with. 

In recent years Indonesian has started to see the light and we are happy to be a part of a fast moving market which we believe will have a long term and sustainable part to play in our future energy mix. 

Wood pellets are generally made from waste biomass products such as sawdust, tree pruning’s or grass clippings. A pellet mill is used to compact the waste biomass into an incredibly dense fuel source. Our pledge to you is to supply top quality pellets using only ethically sourced biomass. 

Capacity 25.000 Tonnes/Month (Consortium Manufacturer) 

Price & Order: phone: +81283285838 

email: bejayawoodpellet@gmail.com 

Branch Office: JL.Taman Heleconia Raya, 

Block HO.2 No.20, Tarumajaya, Harapan Indah, Bekasi West Java Indonesia 

PT. Bestari Anugerah Jaya Orchard Square Gos.C.02, 

Kelapa Hybrida Raya, North Jakarta, 

Indonesia sales@bejaya.com 

Manufacturers ;

Lamongan Surabaya Wonosobo Semarang

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WOOD PELLET CERTIFICATE STANDARDS

WOOD PELLET  CERTIFICATE STANDARDS 

 As a trading commodity that is becoming a world trend, many wood pellet standards are enforced. Basically, the wood pellet standard is sufficient for only 2 things, namely quality and sustainability, which have a lot to do with environmental aspects.

Many quality aspects are related to the technical aspects of wood pellet production and also the raw materials used. A number of countries or certain institutions apply the quality aspects that they can accept for these wood pellet products.

The application of wood pellet quality standards is also related to the use of wood pellets or more specifically technology or tools to consume or use wood pellets as fuel.

Based on this, usually the market segments are also differentiated, namely for industry and households. The industrial segment has its own specifications that are slightly different from that of households. Some of the quality standards that are widely used today: ENplus, DINplus, PFI, ITEBE, Onorm and CANplus. The following are the quality tables:

The second type of standard is about sustainability and is currently starting to be widely applied, especially for the trade in wood pellets in large quantities.

Sustainability standards include the practice of cultivating trees whose wood is the source of the wood pellet raw material. In terms of its application, there are a number of wood pellet buyer countries who are very concerned about this sustainability standard, but there are also some who do not really care about it.

Japan is an example of one country in Asia that is very concerned about this issue of sustainability standards. Some of the sustainability standards that are widely used today: FSC, PEFC and so on

 

 

 

Prospective wood pellet producers must pay attention to the above problems, because they are closely related to the market or trade in wood pellets.

Without being able to map the market comprehensively, it is very possible that wood pellet production will be constrained. For example, a wood pellet producer will target its market in Asia, especially in Japan and Korea, even though the characteristics of the wood pellet market in Japan and Korea are different.

Bejaya Wood Pellet is a Indonesian Company, We are Wood Pellets manufacturer's distributor outlet who source materials from local and Indonesia products. The global wood pellet industry has grown exponentially with. 

In recent years Indonesian has started to see the light and we are happy to be a part of a fast moving market which we believe will have a long term and sustainable part to play in our future energy mix. 

Wood pellets are generally made from waste biomass products such as sawdust, tree pruning’s or grass clippings. A pellet mill is used to compact the waste biomass into an incredibly dense fuel source. Our pledge to you is to supply top quality pellets using only ethically sourced biomass. 

Capacity 25.000 Tonnes/Month (Consortium Manufacturer) 

Price & Order: phone: +81283285838 

email: bejayawoodpellet@gmail.com 

Branch Office: JL.Taman Heleconia Raya, 

Block HO.2 No.20, Tarumajaya, Harapan Indah, Bekasi West Java Indonesia 

PT. Bestari Anugerah Jaya Orchard Square Gos.C.02, 

Kelapa Hybrida Raya, North Jakarta, 

Indonesia sales@bejaya.com 

Manufacturers ;

Lamongan Surabaya Wonosobo Semarang

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