Typhoon Bualoi has caused supply disruptions for Vietnamese wood pellet producers, after it hit central and northern Vietnam on 1 October, causing significant damage to buildings and infrastructure.
The storm brought heavy rain and flooding across regions such as Hanoi, affecting the operations of many wood pellet suppliers' operations.
Producers had to pause the collection of raw materials for wood pellet production because of the severe weather and are currently trying to assess any damage to their wood pellet supplies, said market participants. Harvesting of raw material such as logs and wood chips is expected to halt for about a week, according to market participants. A market participant estimated that the disruptions affect roughly around 10-15pc of monthly production in Vietnam.
Scheduled shipments were also delayed by more than a week because of the typhoon, according to several trading firms. A trader had to postpone loading four wood pellet cargoes for up to 10 days. Another trading firm reported similar delays because of stormy weather at the ports in north Vietnam.
Significant rain has also affected southern Vietnam including Ho Chi Minh and Phu My. This has impacted vessel loadings at ports in these regions. At least two Japanese trading firms had to delay shipments at these ports by more than a week.
But the overall impact on the spot wood pellet market could be limited because of weak demand from key buyer Japan since August following the shutdown of biomass-fired power plants.
Elsewhere in South Korea, wood pellet prices have come under pressure from suppliers from other markets including Indonesia. Vietnamese suppliers were also heard to be more hesitant to participate in South Korean tenders because of lower-priced bids and uncertainty in supply.
