The downward trend if wood pellets prices in Russia continued in October 2020. Export prices have dropped within the range of EUR 5-10 per tonne since September 2020, which is almost 40% lower than in the beginning of the year.
In January-September 2020, the volume of wood pellets output in Russia grew by 6.4% YoY, reaching 1.5 million tonnes, as reported by the Russian Federal Statistics Service (Rosstat).
Regarding trends in the Russian wood pellet market, the prices are expected to remain at the level of October in November 2020. However, the prices in the market are going to increase slightly by the end of the year because of the start of the winter season. It should be noted that the pricing level in the Russian market is driven by weather in Europe. The second wave of Covid-19 also makes a slight impact, as it contributes to reducing industrial production in Europe. However, according to market professionals, climate conditions are still the core driver.
As for foreign demand, it may start recovering in December 2020. Despite the growing surplus of goods in the European market, Russian companies are hopeful that December may see the first shipments of ”delayed” products.
It should be noted that the market still experiences a shortage of warehousing capacities, which also causes a lack of demand: even if purchasing wood pellets at a low price (EUR 60/tonne) is interesting, the lack of goods storage space imposes a limitation on transactions.
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