Wood pellet supply chain logistics in northern Vietnam have been disrupted by heavy rains on 22 July caused by tropical storm Wipha.
Major ports and container freight services in Haiphong paused operations on 21 July and resumed activities on 23 July. This caused congestion at the ports and at vital roadways for cargo transportation, market sources in Vietnam said. Shipments could also see delays because of slower cargo loading. Wood pellets from northern Vietnam are typically shipped to Japan because of their higher industrial grade quality.
In terms of supply, wood pellet suppliers in northern Vietnam conducted broad preventative measures to reduce the storm's impact on their stockpiles and factories, and these measures have been effective, according to a market source. This is a stark difference compared to Typhoon Yagi last year, which destroyed port facilities and warehouses.
But wood pellet supplies could still tighten because of logging constraints resulting from the continuous rains, a market participant told Argus. Wood pellets are made from wood residue after logging and sawmill activities. Northern Vietnam accounts for about 10pc of wood pellet production in the country, according to a Vietnamese producer. Slower logging in northern Vietnam could weigh on feedstock supplies and likely drive prices up.
Weather-related disruptions have previously also been a major factor affecting Vietnamese supply. Argus assessed the price of wood pellets fob Vietnam to Japan at $126.21/t on 11 September 2024, just after Typhoon Yagi struck the northern coast on 7 September 2024. Prices rose to $129.94/t on 30 October 2024 – following the aftermath of Typhoon Trami, which hit on 27 October, while the country was still recovering from the impacts of Yagi.
