SEATTLE - Wood pellet fuel imports to the United Kingdom, the world's largest buyer, have gone up dramatically the past five years and should reach an all-time-high in 2016, says the North American Wood Fiber Review. The U.S. South, the main supplying region, saw shipments rise eight-fold since 2012. 
 
That trend could make North American panel manufacturers nervous, who have historically seen competition for wood fiber from energy companies as a threat to their business, and a factor likely to  drive up costs. That fear could also be fed by official U.S. statistics showing timber harvests were practically the same in 2015 as in 2011, coming in at 355 million cubic meters.

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"This appears to be quite low considering the log demand by the U.S. forest industry," say analysts at Wood Resources International, which publishes the Wood Fiber Review. Citing other statistics derived from log consumption by the forest industry in the U.S. and net log trade, the actual removals of industrial roundwood were probably closer to 411 million cubic meters in 2015, up 10 percent over 2011.

The two big reasons for rising consumption, says WRI in a separate quarterly report, are higher lumber production, and rising wood pellet production. Softwood lumber production was up by as much as 21 percent in the past five years. Production of hardwood lumber increased 28 percent. 
 
The wood pellet sector, concentrated as it is in the Southern States and targeting the European market, has increased six-fold in five years but still consumes just over three percent of the total timber harvest in the U.S. The United Kingdom is by far the largest importer of wood pellets in the world, followed by Denmark, South Korea and Belgium.  
 
Ninety percent of all wood pellet imports to the United Kingdom in the second quarter were shipped from only three countries: the U.S., Canada and Latvia.
Prices have been fairly stable the past 12 months with prices for U.S. sourced pellets about $20-40/ton higher than prices for pellets from other regions.
Pellet manufacturers in the U.S. South have been steadily growing over the past five years. In 2012, the UK imported less than half a million tons from the U.S. and in 2016, shipments may reach more than eight times as much, according to the North American Wood Fiber Review.

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