PIX Pellet Nordic Index: Increasing seasonal prices

PIX Pellet Nordic CIF 18.11.2014: EUR/MWh 30.07 (+0.76 from previous month), SEK/MWh 275.94 (+6.50 from previous month)

Pellet imports from North America to Europe have leveled off recently. Pellet volumes imported from the US South have continued to grow about 10% when comparing Q4/13 and Q2/14, but at the same time Canadian imports to Europe have fallen by almost 25%. Much of the Canadian volumes are now exported to Asian markets, as the shipping distances from
Western Canada are much shorter to Eastern Asia than to Europe.

One of the new pellet consuming projects is the Finnish energy company Helsingin Energia starting co-firing pellets with coal in two of their CHP-plants in Helsinki at the end of this year with a 5-7% share. They have now signed an agreement with Vapo becoming the pellet supplier.  Next year, the city of Helsinki will decide about their future investments in bioenergy. The main options are increasing the pellet share to 40% in the two plants, or to build a totally new power plant which would be using most likely forest chips as its energy source.

The heating season in the Nordics has evidently started. This shows also in many prices reported to us, with several upward changes included in our benchmark data. Euro weakened minimally (less than 0.2%) against the Swedish Crown in October compared to the September 2014 average.

The PIX Pellet Nordic benchmark continued to increase both in Euro and SEK terms. The index value rose by 76 euro cents/MWh,
or by 2.59%, closing at 30.07 EUR/MWh and in SEK terms it headed higher by 6.49 SEK, or by
2.41%, settling at 275.94 SEK/MWh.

Next PIX will be released on TUESDAY December 16, 2014 at 12:00 noon Helsinki time