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 In Germany, Pellet prices rise by 20 percent - market breaks old rules

[Jun 16, 2023]

In the last six weeks, wood pellets have become more than 20 percent more expensive. In the meantime, prices seem to be consolidating just below the 400 euro mark. However, the cheapest time to buy was not in July or August, as is usually the case, but in April. Despite the increase, heating with pellets is still cheaper than heating with oil or gas.

According to the experts from Heizpellet24, wood pellets cost around 390 euros per tonne on a federal average this week. These are the highest skin prices since February and at the same time around 70 euros more than the last low in mid-April. This means that wood pellets have become more expensive by a good 20 percent in the last six weeks. Since the beginning of June, however, the price increase has weakened significantly. Nevertheless, prices continue to rise steadily.

In the federal states, prices have also risen sharply since the end of April. Wood pellets have become the most expensive in Hesse, Thuringia, Baden-Württemberg, Bavaria, Rhineland-Palatinate, Saarland and Saxony-Anhalt – namely between 66 and 91 euros per ton. The prices in Berlin, Brandenburg and Mecklenburg-Western Pomerania rose the least – namely between 16 and 36 euros. In North Rhine-Westphalia, Rhineland-Palatinate and Saarland, pellets again cost more than 400 euros per ton - in Baden-Württemberg, Bavaria, Hesse and Lower Saxony only slightly less.

The regional lowest prices are currently between 365 euros and 370 euros per tonne in Berlin and Brandenburg. In most federal states, however, inflation has also slowed since the beginning of June. In addition, heating with pellets (despite the increase in price) remains cheap compared to other fuels (oil, gas).

The experts from Holzpellets24 have calculated that converted to the energy content, wood pellets at a price of 385 euros per ton correspond to approx. 77 cents per liter of heating oil or 7.7 cents per kWh of natural gas. For comparison: heating oil currently costs just under 90 cents per liter and new contracts for natural gas are still available for around nine cents per kWh. Despite the price increase, heating with wood pellets is still cheaper than heating with oil or gas.

In "normal years" the pellet prices actually reach their seasonal low in the summer months - i.e. from about July to the beginning of August. This is when customers usually order the largest quantities. At the moment it looks as if the pellet prices will continue to rise moderately and thus not repeat the seasonal pattern that was common before the energy crisis.

However, this is not certain, because the influence of external factors is still very large. In addition, the heating season is over and pellet customers can wait and see how prices will develop – without having to freeze. However, they could also have missed the cheapest time to buy – namely April. Since then, pellet prices – and thus heating costs – have increased by more than 20%.

The experts from Holzpellets24 report that the pellet market is currently sending out contradictory signals. The number of orders is declining - as is usual in June - but is still well above the level of the years 2015 to 2021. Due to the still high demand, consumers should not necessarily wait for a summer discount battle in retail, is the recommendation .

On the other hand, it remains to be seen whether the demand for wood pellets will remain as high in the second half of the year. On the supply side, consumers shouldn't worry too much, say the wood pellet experts. After that, the statistics continue to show that the domestic market is adequately supplied - with surpluses that are exported.

Source: Holzpellets24