Premium wood pellet prices in France rose to their highest on record in January-March, according to official data, and have continued increasing later this year, on stronger demand and tight supply.
The average price for bulk deliveries of DIN-Plus pellets rose to €338.30/t ($342.33/t) in the first quarter from €283.80/t a year earlier. Bagged pellet prices rose to €340.30/t from €290/t a year earlier, data from the ecological transition ministry show. Prices for both products climbed to their highest since industry records began in 2007.
For the first quarter, the increase in prices on the year comes despite heating degree days in Paris dropping to an average of 428.33 from 451.50 last year, below the 10-year average of 442.40. Demand for pellets has grown significantly so far this year, as more users switched to pellets from other heating alternatives in winter 2021-22 and also as stocking demand has held strong so far this summer. Pellet-fired boiler sales have increased by 164pc on the year so far in 2022, according to a French market participant that estimated this could translate into a 600,000t increase in demand for pellets in the country.
Retail pellet prices in the country have increased further since the start of summer and in August were heard in the range of €450-550/t, including 20pc value-added tax. Demand continues to exceed supply, as residential users reportedly have been panic buying in France and elsewhere in Europe over fears of gas supply interruptions in the coming heating season.
But the sharp price increases may discourage retailers from stocking pellets any further amid fears that buyers may refuse to purchase at higher prices.
