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Forisk Wood Fiber Review: Spotlight on Q2 2020 U.S. Pellet Feedstock Fiber Prices

This post contains a sample from the Q2 2020 Forisk Wood Fiber Review.

U.S. pellet feedstock fiber prices were stable in Q2 2020, despite the effects of the coronavirus. The U.S. Pellet Feedstock Price Index (PFPI-US)[1] increased 0.2%, reaching $60.60/odmt. Roundwood delivered prices in the U.S. South eased modestly while other feedstock price drivers were volatile. Although most sawmills have returned to operations, at least 13% of U.S. softwood sawmill capacity temporarily curtailed in Q2 2020 as a result of Covid-19.

U.S. export-oriented wood pellet capacity continues to increase, with most growth in the South Central region. Pinnacle began construction on its 360K metric ton facility in Demopolis, AL. The project―a joint venture with Pinnacle, Westervelt, and Two Rivers Lumber― is scheduled to begin operations in Q2 2021. Enviva continues to make progress on its announced “Pascagoula Cluster.” The company plans to build three new 700K metric ton pellet plants in the Gulf Coast: Lucedale, MS; Epes, AL; and Taylorsville, MS (expected). Enviva Lucedale is under construction and is expected online by early 2021. Huntsville Pellets began operations at its 40K metric ton mill in Huntsville, Texas. Drax is expanding its Morehouse, Amite, and LaSalle facilities by a combined 350K metric tons. Though still publicly committed, the timing of these capital investments is under review, however.

Click here to learn about the Forisk Wood Fiber Review (FWFR), which has tracked pulpwood, wood chip, and biomass markets in the U.S. and Canada since 1983.

[1] The FWFR pellet feedstock price indices for Canada and the US (PFPI-US and PFPI-CA), launched in 2013, show a quarterly volume-weighted price for the fiber consumed by each country’s pellet sector. The feedstock mix (roundwood, sawdust, shavings, microchips, and biomass), production capacity, and operating rates are gathered to calculate the regional price index. The price indices include the cost of chipping the roundwood and the hammering but not the drying costs.

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