A pellet producer survey shows that the COVID-19 pandemic is impacting raw material availability. Most producers expect costs to increase later this year.
- 58% of pellet producers surveyed felt negatively impacted by COVID-19.
- Reduced sawmill residue availability was the most frequently stated cause; 82% of those who felt negatively impacted by COVID-19, felt that reduced availability of sawmill residues was affecting them.
- 78% of participants were concerned about future sawmill residue availability to some degree.
- However, most producers do not believe that COVID-19 will severely impact production going forward; 61% do not think COVID-19 will cause them to reduce production in the second half of 2020.
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. 82% of producers negatively affected by COVID-19, reported some affect. Almost 14% 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% of European companies negatively affected by COVID19, 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% 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% of producers) expect those cost increases to be less than 10%.
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. 48% 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% 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).
The post COVID-19 pandemic is impacting raw material availability for wood pellet producers appeared first on Timber Industry News.