Notes

Vietnam timber pellet production and also exports<br>
In the past 7 years, Vietnam timber pellet export expands from no to around 2.75 million tons annually, with most to Korea as well as Japan. However as the price advantage reduce, will it remain to expand? What's the pattern of Vietnam wood pellet sector?



John Swan, a procedure specialist who has been guiding the style and also devices option for brand-new pellet plants in Vietnam, assessed the present circumstance as well as future pattern of Vietnam timber pellet export.



Vietnam timber pellet production benefits from affordable

Timber pellets in Vietnam are mostly made from the spin-offs of furniture manufacturing. https://linpvr.org/small-wood-pellet-mill/ has reduced moisture web content and also small size. Many early wood pellet factories don't require drying out or squashing devices. With reduced labor expense, they can conserve a great deal of production cost.



For a long period of time, there are a multitude of container cargos delivered from Korea to Vietnam and also only small quantities from Vietnam to Korea. Wood pellet makers can take advantage of the excess empty container for shipment at low cost. The transport expense is lower than $10 per lot.



Vietnam wood pellet manufacturing price will rise

The shipping cost is going to rise. The fast development of freights from Vietnam to Korea decrease the excess containers. The delivery expense will certainly rise to $20/ton from Vietnam to Japan.



The raw product expense is going to climb. The furniture manufacture in Vietnam increase from 2.1 million lots to 7.2 million loads in the past one decade, with the yearly growth rate of 13%. By comparison, the wood pellet export increases from 160,000 to 2.46 million heaps, with the yearly growth rate of 61%. So the need for furniture handling waste development much more than the supply.



To broaden manufacturing, Vietnam suppliers will increasingly rely on woodland residuals and logs. These products set you back greater and need peeling off, damaging, squashing and also drying for making pellets. So the marginal expense will rise.



Vietnam timber pellet export cost will boost

Most of Vietnam's timber pellets are exported to Korea and Japan.



In the chart below, the environment-friendly line reveals the weighted rate of the top 6 wood pellet suppliers to Korea, and also the red line reveals the price of Vietnam timber pellets. As Vietnam domains the Korea timber pellet market, other 5 suppliers only occupy less than 20% market share. wood chip pellet maker can discover that the development of Vietnam wood pellet rate pushes up the ordinary weighted cost.




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



The development of Vietnam wood pellet industry is limited

We can examine the growth potential based upon the manufacturing intensity of a certain area. It describes the complete timber pellet manufacturing split by the production location. The manufacturing location does not includes the land that is not forested or is not available for tree harvesting.



According to data, Vietnam timber pellet manufacturing proliferates, with the production intensity from 8ton/squre km to 13.4 ton/squre km. It has exceed the biggest wood pellet manufacturing states in America, Georgia and north Carolina.



This procedure doesn't represent other markets depending upon forestry resources, like paper mills and wood products mills. Some locations have large available forestry area yet reduced pellet production strength. They might be prospects for brand-new wood pellet export ability.




In all areas, the initial batch of timber pellet factories have the very best mix of basic material distribution expense as well as mill-to-port logistics, while brand-new manufacturing facilities do not have these advantages. Their price of resources as well as logistic is more than existing manufacturing facilities. Compared to America and Canada, Vietnam don't have huge locations of possible forestry.



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

With more wood pellet plants are integrated in Vietnam, their competitors on resources will certainly increase. With the increase of manufacturing expense, the wood pellet cost will certainly expand and also approach the worldwide market stability rate. At that time, the size of the Vietnam pellet export market will certainly maintain.



There will certainly be loan consolidation in Vietnam timber pellet industry. Preponderant producers will certainly obtain well-built as well as well-located plants, as well as the less competitive plants will certainly close.



Freshly built timber pellet plants will certainly adopt first-rate design, equipment, and operations. They will certainly make top quality timber pellets with sustainable sources.



The capacity of Vietnam wood pellet producers is mosting likely to match with long-lasting arrangements. Much more producers will certainly export wood pellets to Japan according to lasting supply contracts, and Korea policy will progress to sustain long-term supply contracts.


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