Pellet production in Spain still has a wide margin for growth, since only 35% of the biomass resources generated each year are used, which are around 50 million cubic meters.
This low use, 30 points below the half eurOpea, causes excessive accumulation of wood in the mountain, since Spain has more than 28 million forest hectares, with stocks of more than 1,100 million cubic meters of biomass (wood, wood, etc.)
However, in the last two years there have been difficulties at auctions and, at times, a shortage of raw materials, which increases the price of the pellet and generates the feeling – which is erroneous – that the market is saturated. This has been revealed at the International Conference on the Domestic Pellet Market (CIMEP), convened by the Spanish Association for the Energy Recovery of Biomass (Avebiom), which was held within the framework of Expobiomasa 2019.
Correction elements
To try to correct the contrast between the frequent symptoms of saturation, followed by intervals of high demand, experts have put on the table some tools that could provide stability to the market.
On the one hand, "the stock could be distributed throughout the supply chain would prevent the demand from being so punctual in certain periods and that the market voltage does not recay only on the producer, which at the same time could correct some peaks and increases in the price," explained the president of European Pellet Council, Pablo Rodero.
At the same time, Rodero recommended the implementation of “powerful and underdeveloped economic instruments, such as future ones, that would provide greater security to producers.” And finally he recalled that the lack of large biomass projects is another of the factors that "contribute to the generation of those moments of 'stress' in the pellet market."
Market trends
CIMEP has been a meeting point where you can learn about market forecasts for Spain, as well as trends in purely producing countries (such as Portugal, Canada and Poland) and in the main consumers and importers, such as Italy and France.
Specifically, the two most important factors were analyzed in the evolution of the Pellet market. On the one hand, the raw material, to which a block has been dedicated with the presence of the different agents: forest companies, administration and forest owners. And, on the other, the facilities that consume the pellet, both in Spain and in EurOPA.
For professionals in the pellet sector, it is important to know the trends, both in the national and international pellet markets, since they set the tone for their activity forecasts. Above all, the forecast imports from Portugal and other producing countries to Spain, as well as the forecast exports to Italy and France.
Pellet production
The production of domestic pellets in Spain, which has tripled since 2012, has evolved based on the progressive increase in demand, which has recorded record sales figures since 2014 and which this year will reach 650,000 tons.
Regarding production, in 2018 it amounted to 593,000 tons of pellets, 12% more than the previous year. The 2019 forecast points to an increase of 22%, up to 722,000 tons, due to the increase in production capacity in several important factories and the start-up of new ones.
