Stretched curve starts to adjust to currency shift

摘要

The expected value of wood pellets in the next few years has started to fall, in reaction to a shift in the economics of burning pellets for both power and heat that created unsustainable tensions in the market’s structure. The idea of pellets hitting a hard price ceiling was almost inconceivable a year ago. Where subsidies were in place, they encouraged industrial pellet burn regardless of prevailing power prices. Heating oil prices of close to $1,000/t on the spot market generated a cost advantage for residential heating of 30pc of more, and ensured a steady stream of installations of new pellet-fired stoves and boilers.