In some places, pellet prices fall below 300 euros per tonne. It hasn't happened in two years. At the end of November, wood pellets will only cost just over 300 euros per tonne in federal funding. The massive price drop is actually atypical for pellet prices in the middle of the heating season. But it could go even further down.

Pellet prices fall under the 300-euro mark in some federal states at the end of November. These are the lowest pellet prices in two years. There is no end to the extraordinary fall in prices yet. Contrary to all forecasts, the decline in wood pellets prices accelerated again in November. Especially in the second half of November it went steeply down again.

Experts from the trade portal heizpellet24.de determined that wood pellets cost around 305 euros per tonne in the last week of November. That's 35€ less than four weeks ago. Compared to the last price peak in early July, when pellet prices had broken through the 400-Euro mark in the short term, prices are currently 95 Euro per tonne lower.

On the platform holzpellets.net, the average price is slightly higher at around 318 euros per tonne. There are also no prices below 300 Euro. However, the trend has so far been the same: prices continue to fall. However, holzpellets.net does not see much further downside potential, partly due to rising prices for sawdust.

Pellet prices fall to a two-year low

Meanwhile, pellet prices have also significantly undercut the previous year's low at the end of April and cost as much as last December 2021. At that time, customers could buy their wood pellets at similar low prices as now. In some federal states, prices have fallen significantly below the 300-Euro mark, at least at heizpellets24.de. Pellet experts had not believed a few weeks ago that the previous year's low could be reached at all.

However, these doubts have vanished into thin air and it continues to decline. The heating period has begun and the pellet price continues to fall. This is a good signal for consumers. Heating with pellets means security of supply with a domestic energy source, which is also confirmed by the high production volume in the third quarter 2023," explains Martin Bentele, Managing Director of the German Pelletin Institute (DEPI), explaining the price slide.

Another reason could be that pellet prices are still relatively high in the long term. According to DEPI, the average annual prices for wood pellets up to 2021 have been around the brand of 240 euros per tonne. The monthly average price for November was reported by DEPI with around 350 euros per tonne, i.e. more than 100 euros higher. Even with a reasonable inflation surcharge, an average price of permanently less than 300 euros seems realistic.

Falling wood prices and very large supply

There is therefore no end to the unusual decline in prices. One important reason for the persistently low pellet prices is likely to be the sharp fall in prices for wood and wood by-products. The price drop observed there continues to depress the prices for heating pellets and is expected to keep them down. In addition, the domestic production of wood pellets, which significantly increased last year, apparently continues to exceed (also increased) domestic demand, say pellet experts. This also exerts a powerful pressure on pellet prices and prevents an increase or decrease in pellet prices. slows it down significantly.

Customers expect prices to fall further

"Many customers are simply too well stocked to be active on the market again despite attractive prices. The numerous new owners of a pellet heating system, who in the meantime have put the devices into operation after the application boom for subsidies in August 2022, are also through with the initial stocking," the experts at Heizpellets24 explain the price decline. Last but not least, many customers had purchased pellets early on, which further reduces the quantities currently purchased.

"Another customer group is speculating on even cheaper pellet prices in view of the intact downward trend and could thus be successful "Wood pellets cost less than 300 euros per tonne in some federal states, such as Bavaria, Baden-Württemberg, Hesse and Schleswig-Holstein, and in many other countries only slightly more. Wood pellets are by far the most expensive at heizpellets24 in Bremen and Germany.

At holzpellets.net, the three most expensive federal states are Bremen, Lower Saxony and North Rhine-Westphalia with prices between 355 and 360 Euro per tonne. The cheapest three prices can be found at holzpellets.net in Hamburg, Schleswig-Holstein and Bavaria, each with a little over 308 euros per tonne.