Notes

Vietnam timber pellet production and also exports<br>
In the past 7 years, Vietnam wood pellet export expands from no to around 2.75 million heaps each year, with a lot of to Korea and Japan. However as the rate advantage reduce, will it continue to expand? What's ecostan pellet machine of Vietnam wood pellet sector?



John Swan, a procedure specialist who has been directing the style and devices selection for brand-new pellet plants in Vietnam, evaluated the present scenario and also future trend of Vietnam timber pellet export.



Vietnam wood pellet production gain from affordable

Wood pellets in Vietnam are generally made from the spin-offs of furnishings manufacturing. These sawdust has reduced wetness content and also small dimension. Many early wood pellet manufacturing facilities do not need drying or crushing machines. With reduced labor expense, they can save a large amount of production price.



For a very long time, there are a great deal of container freights shipped from Korea to Vietnam and also only small quantities from Vietnam to Korea. Wood pellet producers can make use of the excess empty container for delivery at affordable. The transportation cost is less than $10 per load.



Vietnam wood pellet production price will certainly rise

The shipping price is mosting likely to rise. The rapid growth of freights from Vietnam to Korea reduce the excess containers. The delivery price will certainly rise to $20/ton from Vietnam to Japan.



The raw material price is going to increase. The furniture manufacture in Vietnam boost from 2.1 million loads to 7.2 million bunches in the past ten years, with the yearly growth rate of 13%. By contrast, the wood pellet export enhances from 160,000 to 2.46 million tons, with the yearly development price of 61%. So the need for furnishings handling waste development much more than the supply.



To broaden production, Vietnam makers will significantly count on forest residuals and also logs. These materials set you back greater and need peeling off, damaging, squashing and drying out for making pellets. So the limited cost will certainly rise.



Vietnam wood pellet export rate will certainly enhance

The majority of Vietnam's wood pellets are exported to Korea as well as Japan.



In the graph below, the environment-friendly line reveals the weighted rate of the top 6 timber pellet vendors to Korea, as well as the red line reveals the rate of Vietnam timber pellets. As hay pellet making machine , other 5 providers only occupy less than 20% market share. We can locate that the development of Vietnam wood pellet price pushes up the typical weighted cost.



Japan wood pellet market likewise show the increase of Vietnam wood pellet rate. A lot of Japan's timber pellets are imported from Canada and also Vietnam, with Canada using up 65% -70%. The green line shows the weighted rate of Canada as well as Vietnam wood pellet export. The red line reveals Vietnam's timber pellet export cost rebound.



The growth of Vietnam wood pellet market is limited

We can examine the development possible based on the manufacturing intensity of a particular location. It describes the complete timber pellet production separated by the production area. The manufacturing area doesn't consists of the land that is not forested or is not offered for tree harvesting.



According to data, Vietnam timber pellet production grows rapidly, with the manufacturing strength from 8ton/squre kilometres to 13.4 ton/squre kilometres. It has exceed the biggest wood pellet manufacturing states in America, Georgia as well as north Carolina.



This step doesn't represent other industries relying on forestry sources, like paper mills and also wood items mills. Some areas have big readily available forestry location however reduced pellet production intensity. They may be prospects for new timber pellet export capability.



In all locations, the initial batch of timber pellet factories have the best mix of raw material shipment expense and also mill-to-port logistics, while brand-new factories don't have these benefits. Their expense of resources and also logistic is greater than existing manufacturing facilities. Compared with America and also Canada, Vietnam don't have large areas of possible forestry.



What's the future of wood pellet export in Vietnam?

With more wood pellet plants are built in Vietnam, their competitors on basic materials will certainly boost. With the boost of manufacturing cost, the timber pellet price will grow and also approach the international market equilibrium rate. During that time, the size of the Vietnam pellet export field will certainly support.




There will certainly be combination in Vietnam timber pellet industry. Preponderant producers will obtain sturdy as well as well-located plants, and also the much less competitive plants will shut.




Newly constructed wood pellet plants will embrace world-class design, equipment, as well as operations. They will certainly make high-grade wood pellets with lasting resources.



The ability of Vietnam wood pellet producers is going to match with long-term arrangements. A lot more manufacturers will certainly export wood pellets to Japan according to long-lasting supply contracts, and Korea plan will certainly advance to support long-term supply agreements.


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