In the past 7 years, Vietnam wood pellet export grows from absolutely no to around 2.75 million tons each year, with a lot of to Korea and also Japan. But as the price advantage diminish, will it remain to expand? What’s the trend of Vietnam wood pellet sector?

John Swan, a procedure specialist that has been guiding the style and also devices option for brand-new pellet plants in Vietnam, assessed the current situation and also future pattern of Vietnam timber pellet export.

Vietnam timber pellet manufacturing gain from affordable

Wood pellets in Vietnam are generally constructed from the by-products of furniture production. These sawdust has low moisture material and also tiny dimension. So many very early timber pellet factories don’t require drying or squashing makers. With low labor price, they can conserve a large amount of manufacturing expense.

For a very long time, there are a great deal of container freights delivered from Korea to Vietnam as well as only small quantities from Vietnam to Korea. Wood pellet makers can use the excess vacant container for delivery at affordable. The transportation expense is lower than $10 per bunch.

Vietnam wood pellet manufacturing price will certainly rise

The shipping expense is going to climb. Richi machinery of freights from Vietnam to Korea decrease the excess containers. The shipping expense will rise to $20/ton from Vietnam to Japan.

The raw material expense is mosting likely to increase. The furniture manufacture in Vietnam rise from 2.1 million lots to 7.2 million heaps in the past one decade, with the yearly growth rate of 13%. By contrast, the timber pellet export enhances from 160,000 to 2.46 million tons, with the annual growth price of 61%. So fish pellet mill for furniture processing waste development a lot more than the supply.

To increase production, Vietnam suppliers will significantly count on woodland residuals and logs. These products cost greater and also need peeling, damaging, crushing and also drying for making pellets. So the low expense will certainly rise up.

Vietnam timber pellet export rate will raise

The majority of Vietnam’s timber pellets are exported to Korea and also Japan.

In the graph below, the eco-friendly line shows the heavy rate of the leading 6 timber pellet distributors to Korea, and the red line reveals the price of Vietnam wood pellets. As Vietnam domain names the Korea wood pellet market, other 5 providers only take up less than 20% market share. We can locate that the development of Vietnam timber pellet rate raises the typical weighted price.

Japan timber pellet market likewise mirror the surge of Vietnam wood pellet price. Most of Japan’s wood pellets are imported from Canada as well as Vietnam, with Canada taking up 65% -70%. The eco-friendly line reveals the weighted cost of Canada and also Vietnam wood pellet export. The red line shows Vietnam’s timber pellet export cost rebound.

The growth of Vietnam timber pellet industry is restricted

We can assess the growth potential based upon the manufacturing intensity of a specific location. It describes the complete wood pellet manufacturing split by the manufacturing area. The manufacturing location doesn’t consists of the land that is not forested or is not readily available for tree harvesting.

According to stats, Vietnam wood pellet manufacturing proliferates, with the manufacturing intensity from 8ton/squre kilometres to 13.4 ton/squre kilometres. It has go beyond the biggest timber pellet manufacturing states in America, Georgia and also north Carolina.

This measure does not make up various other industries depending upon forestry resources, like paper mills and timber items mills. Some locations have big available forestry area however low pellet manufacturing intensity. They may be prospects for new timber pellet export capability.

In all areas, the very first set of wood pellet manufacturing facilities have the most effective combination of resources shipment price and mill-to-port logistics, while new factories do not have these advantages. Their price of resources and logistic is higher than existing manufacturing facilities. Compared to America and Canada, Vietnam don’t have big locations of prospective forestry.

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

With even more timber pellet plants are integrated in Vietnam, their competitors on raw materials will enhance. With the rise of production expense, the timber pellet cost will grow as well as come close to the worldwide market equilibrium cost. During that time, the dimension of the Vietnam pellet export sector will stabilize.

There will certainly be combination in Vietnam timber pellet sector. Superior manufacturers will certainly get durable as well as well-located plants, as well as the less competitive plants will close.

Freshly constructed timber pellet plants will certainly adopt first-rate design, tools, and operations. They will certainly make top quality wood pellets with lasting resources.

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