Just over a year ago, our team decided to add two issues to the editorial calendar at Pellet Mill Magazine. At the same time, we decided to introduce editorial themes to each issue and finally, we decided that the final issue in 2015 would be dedicated entirely to Asian pellet production and markets. Our planning for the 2015 year came on the heels of the U.S. Industrial Pellet Association’s Exporting Pellets Conference and it was clear that the Asian marketplace was going to be worthy of our attention in 2015. We were right, but for the wrong reasons. Beginning in late 2013, monthly imports of wood pellets began to skyrocket and grew month over month deep into 2014. South Korea finished 2014 importing just under 2 million tons and it seemed a certainty that the long-awaited Asian market had arrived with South Korea being the region’s first buyer.

Since that time, pellet imports have plummeted and imports from North America are almost completely stalled out. What transpired is a complex story, and we’ve dedicated the bulk of this issue to telling it. Katie Fletcher worked closely with Gordon Murray at the Wood Pellet Association of Canada for her feature, “Situation South Korea.”  Without a doubt, Murray is the most knowledgeable person in North America with regard to the South Korean marketplace and its challenges and for good reason. For now, the North American producers best positioned to benefit from increased pellet buying activity from South Korean buyers are his members in British Columbia. Installed pellet capacity in that province alone is over 2 million tons and more capacity is being planned and built. Pellets shipped from the Port of Vancouver will reach South Korean ports in two weeks, less than half the time required to get a vessel there from the Baton Rouge, Port of Brunswick or the Port of Chesapeake.

From talking with Gordon, and Fletcher’s story, it is clear that the South Korean market is a long way from becoming a market any producer, or lender, could bank on. The challenges are varied and include everything from cultural and language barriers, to ultralow-cost providers in the region, to the low inclusion rates of wood pellets and what that means for quality demands. Still, the work to open and stabilize new markets for wood pellets in Asia will continue. The opportunity is simply too great to stop now.

Tim Portz
VICE PRESIDENT OF CONTENT & EXECUTIVE EDITOR
tportz@bbiinternational.com