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BIOMASS – RWE squeezes European wood
pellet market
The following
information is provided by Montel (www.montel.no)
17 February 2012 -
(Montel)
Biomass players are struggling to
secure prompt pellet supplies, amid the emerging dominance of RWE on
the spot market and heightened demand from Eastern Europe, players
said on Friday.
The front month industrial wood pellet contract was last assessed at
EUR 135.81/t, up by EUR 0.31 week on week, while the Cal 13 gained
EUR 0.26 to EUR 136.28/t, according to Anglo-Dutch exchange
APX-Endex’s latest assessments.
The prices include a cost, insurance and freight (Cif)
Rotterdam component.
“It’s a very tight market,”
said a Dutch biomass trader, adding, “Some people are looking for
immediate delivery in eastern and central Europe, where there’s been
very cold weather.”
“But there’s nothing available,
especially as RWE is coming into the market [to feed its newly
opened 750 MW Tilbury biomass-fired power plant, in south-east
England],” he added.
“The market is really tight at
the moment, and March could be even worse,” said a biomass trader
with a European utility.
“This is mainly due to a big
increase in demand, which is mostly because of RWE,” he added.
“RWE are still buyers,” said a
biomass broker, noting the firm is taking some 3,000-6,000 tonnes
per month from the spot market.
Sustainability question
Meanwhile, key market participants – including utilities and
producers – met in Amsterdam on Thursday to discuss the possibility
of introducing a binding European wood pellet sustainability
criteria.
Although no agreement was
reached, participants “were leaning towards” RWE’s Green Gold Label
certificate, as opposed to alternative specifications developed by
independent UK generator Drax and Belgian firm Electrabel, a utility
trader who attended the meeting said.
“There was not really any
progress,” he said, noting Sweden, Finland and Austria still remain
against any such binding criteria.
“The biggest benefit of one
criteria for all of Europe is the opportunity to trade between each
other,” he said, adding, “For example, the market is tight at the
moment, and we could do some swaps [with other utilities]. But that
is not possible at present.”
“The main problem with pellets
is that almost every big buyer has their own sustainability
criteria,” said the Dutch biomass trader, adding, “Producers have to
meet all sorts of specifications for each utility, and this is
really a disaster.
“It’s strange that what is
basically sawdust has such a huge selection of specifications, while
you can import trainers, made with child labour, without any
problem,” he said.
Montel provides
independent news, along with real-time and historical data, from
across the power and fuels markets – including coal, gas, oil and
biomass.
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