Wood pellet exports from North America increased by 764,000t on the year in the first half of 2022, mostly because of quicker shipments to Japan and northwest Europe from the US.
Combined wood pellet loadings in the US and Canada increased to 5.9mn t in January-June from 5.2mn t a year earlier. The bulk of the increase was seen in the US, with shipments growing on the year to 4.3mn t from 3.6mn t in the first six months of 2021. While Canadian loadings remained flat on the year, at 1.6mn t.
US shipments to the Netherlands grew by the most in January-June, to 697,000t from 485,000t a year earlier. This was followed by Japan, Denmark and the UK, where receipts increased by 177,000t, 135,000t and 107,000t, respectively. The UK remained by the far the largest recipient of US wood pellets, at 2.8mn t in January-June.
Wood pellet exports from the US turned higher on the year for each month in the first half of the year, despite reported delays in shipments owing to the Covid-19 pandemic and associated workforce shortages in the first quarter.
The lion's share of the yearly increase was recorded in June, with US shipments reaching 832,000t from 604,000t a year earlier, at least partly as more production from Enviva's newly commissioned 750,000 t/yr Lucedale plant and Drax's 360,000 t/yr Demopolis plant probably boosting exports.
In Canada, slower exports to northwest Europe were more than offset by increased deliveries to Asia. Canadian shipments to Japan rose to 639,000t in January-June from 500,000t a year earlier, and exports to South Korea rose to 215,000t from 121,000t.
The growth in deliveries to Japan was mostly owing to long-term offtake agreements for around 2mn t/yr of North American pellets that were due to kick-in within 2022. The majority of these, around 1.5mn t/yr, are expected to be supplied from the US and the remaining 520,000 t/yr will come from Canada. Although the combined 316,000t increase in North American shipments to Japan in January-June suggests that at least some of the term contractual volumes to Japan may have been met by delivering Asian pellets instead.
Most long-term contracts between North American suppliers and Japanese counterparties do not limit the source of pellets. And with the increase in pellet production costs so far this year, it could be more economical for suppliers to source from Vietnam or Malaysia for Japan deliveries.
An additional 175,000 t/yr of long-term contracts between Canadian producers and South Korean buyers are also expected to kick-in in 2022.
Exports to the UK from Canada fell to 613,000t in the first six months from 782,000t a year earlier, which could be at least partly because of lower power sector demand for pellets owing to outages at major pellet-fired plants in spring. The trend was similar for Canadian shipments to the Netherlands, which fell to almost zero from 60,000t a year earlier.
Throughput at major ports up in US, down in Canada
Wood pellet throughput at seven of the US' 10 largest export terminals grew on the year in January-June. Exports from the Louisiana port of Baton Rouge grew by the most, to 998,000t from 517,000t a year earlier. And throughput at the Port of Savannah, Georgia, also grew significantly, to 842,000t from 509,000t. The Georgian Port of Brunswick saw loadings fall to 176,000t from 335,000t a year earlier.
Throughput at Canada's two major wood pellet loading ports fell in the first half of the year. Shipments through the Port of Vancouver fell to 518,000t from 593,000t a year earlier. And throughput in Prince Rupert dropped to 732,000t from 751,000t in the same period.
