FEBRUARY 2019 ENERGY EXCHANGE: TRADE OVERVIEW

Biomass prices in Lithuania in February reach unusual lows

The turnover of the Baltpool biomass exchange, which increased in January, in February dropped by 40% and amounted to EUR 3.34 million. A total of 20,922 TOE of woodchips was sold, which is a one-third decrease compared to January (31,332 TOE); the amount of biomass delivered over the same period was 23% smaller than in January, i.e. 45 thousand TOE.

The largest share of the transactions for woodchips (74%) accounted for one-week transactions, 25% accounted for one-month transactions, and the remaining share accounted for half-year transactions. It is not surprising that one-week transactions were the most popular transaction type in February: the price under these transactions dropped by 14.5% in one month. The value of the Baltpool Wood Chips Spot Lithuania (BWCS Lithuania) index was 159.87 EUR/TOE on 5 February and 136.72 EUR/TOE on 26 February. By the end of the month, the value of the index was 32% lower than in the same period last year.

It should be noted that, by the end of February when fairly heavy rains started, the SPOT price resumed growth. During the first auction held in March, the index price increased slightly and amounted to 144.16 EUR/TOE.

“The turnover of the biomass exchange in February was smaller because one auction fewer was held. Furthermore, the air temperature in February was higher than normal; consequently, no biomass consumption peak typical of this month was observed. Also, the price under short-term transactions continued to decrease for the second consecutive month. This was very beneficial for those who have not accumulated the entire biomass supply portfolio for the current heating season. Buyers could benefit from the low prices and started to conclude transactions and purchase biomass for the forthcoming summer season,” said Vaidotas Jonutis, Trade Manager at Baltpool.

In February, buyers from the Curonian Spit concluded a long-term transaction for the supply in the summer season for the weighted average price of 130 EUR/TOE, which is 11% lower compared to the average price under long-term transactions for the supply in the last year’s summer season (144.56 EUR/TOE). Heat producers from other counties also purchased biomass in February for the summer season under one-month and half-year transactions: the lowest purchase price of biomass (104 EUR/TOE) was recorded in Kaunas County, while the highest price (140 EUR/TOE) was recorded in Tauragė County.

In February, the weighted average price under concluded transactions, similarly to the prices in the preceding month, consistently decreased by 9% – from 171.05 EUR/TOE to 159.25 EUR/TOE, while the annual decrease amounted to as much as 27%.

The value of concluded short-term transactions in Latvia amounts to EUR 85.5 thousand

Compared to January, the weighted average price under concluded transactions in the last winter month was 4% lower. Latvian heat producers purchased SM2 biomass products in Courland, Riga and Zemgale regions under one-week transactions for the weighted average price of 178.25 EUR/TOE. In February, Latvian sellers concluded 73% of their transactions with Lithuanian buyers for the weighted average price of 161.50%, while the remaining share was sold to Latvian buyers for 171.88 EUR/TOE. The value of the concluded transactions amounted to more than EUR 85.5 thousand.