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In homemade wood pellet maker , Vietnam wood pellet export expands from absolutely no to around 2.75 million loads annually, with the majority of to Korea and also Japan. However as the price advantage lessen, will it continue to expand? What’s the trend of Vietnam wood pellet sector?

John Swan, an operation professional that has been guiding the layout and devices option for brand-new pellet plants in Vietnam, analyzed the present situation and also future trend of Vietnam timber pellet export.

Vietnam timber pellet production benefits from affordable

Timber pellets in Vietnam are mainly constructed from the by-products of furnishings manufacturing. These sawdust has reduced dampness web content and also tiny size. Numerous early wood pellet manufacturing facilities do not require drying out or squashing machines. With low labor expense, they can conserve a good deal of manufacturing cost.

For a long time, there are a lot of container cargos shipped from Korea to Vietnam and just small quantities from Vietnam to Korea. Wood pellet suppliers can make use of the excess empty container for shipment at low cost. The transportation expense is lower than $10 per lot.

Vietnam timber pellet manufacturing expense will certainly increase

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

The raw product price is going to rise. The furniture manufacture in Vietnam increase from 2.1 million lots to 7.2 million loads in the past 10 years, with the annual growth price of 13%. By contrast, the timber pellet export boosts from 160,000 to 2.46 million bunches, with the annual growth rate of 61%. So the need for furniture processing waste development much higher than the supply.

To expand manufacturing, Vietnam makers will progressively count on forest residuals and also logs. These materials set you back higher as well as require peeling off, damaging, squashing and drying out for making pellets. So floating fish feed making machine will certainly rise.

Vietnam wood pellet export price will boost

A lot of Vietnam’s timber pellets are exported to Korea as well as Japan.

In the graph below, the eco-friendly line reveals the weighted cost of the leading 6 timber pellet distributors to Korea, and the red line reveals the cost of Vietnam timber pellets. As Vietnam domains the Korea wood pellet market, various other 5 vendors just use up less than 20% market share. We can discover that the growth of Vietnam timber pellet price pushes up the typical heavy rate.

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

The growth of Vietnam timber pellet market is restricted

We can evaluate the growth possible based on the manufacturing strength of a particular location. It describes the overall timber pellet production divided by the production area. The production location doesn’t includes the land that is not forested or is not available for tree harvesting.

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

This procedure doesn’t make up various other industries depending upon forestry resources, like paper mills as well as wood items mills. Some locations have big offered forestry area but reduced pellet production intensity. They might be prospects for brand-new wood pellet export capacity.

In all locations, the initial batch of wood pellet factories have the most effective mix of raw material distribution price and also mill-to-port logistics, while brand-new factories don’t have these benefits. Their price of raw materials and logistic is higher than existing factories. Compared with America as well as Canada, Vietnam don’t have large locations of possible forestry.

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

With more wood pellet plants are built in Vietnam, their competitors on raw materials will certainly increase. With the increase of manufacturing expense, the wood pellet rate will certainly grow and also approach the worldwide market balance cost. At that time, the size of the Vietnam pellet export sector will stabilize.

There will be consolidation in Vietnam wood pellet sector. Preponderant suppliers will acquire well-built and well-located plants, and the much less affordable plants will certainly shut.

Newly built wood pellet plants will certainly adopt first-rate design, devices, and operations. They will certainly make high-grade wood pellets with sustainable sources.

The capacity of Vietnam wood pellet manufacturers is mosting likely to match with long-lasting arrangements. Extra producers will export timber pellets to Japan according to lasting supply agreements, and Korea policy will advance to support lasting supply arrangements.