Another phenomenon shows that the sharp price increase at the beginning of the year also took the industry by surprise: since the end of January, loose wood pellets have been more expensive than bagged goods for the first time ever.

Prices for wood pellets fall in March. The heating season is almost over and supply is increasing. Pellet buyers can sit back and wait for low prices.
 
Pellet prices are falling in March. In the first two weeks of March, prices fell by around 12 euros per tonne. For the time being, prices are moving sideways at this level.

There is some evidence to suggest that prices will fall more sharply once the heating season is over. But that would not be too long away. After all, while supply is increasing - i.e. production is being ramped up - the heating season is about to come to an end. This means that the acute short-term demand is declining. The Pellets Industry Association expects production volumes and therefore supply to increase in 2025.

The experts at Heizpellst24 also noted that scarce stocks and a sudden surge in demand had led to a surprisingly sharp price increase at the beginning of 2025. In February 2025, wood pellets were a good EUR 100 or 40 % more expensive than at the end of December 2024. That was a huge price jump. But now the market is turning again.

Bagged goods recently cheaper than loose pellets

Another phenomenon shows that the sharp price increase at the beginning of the year also took the industry by surprise: since the end of January, loose wood pellets have been more expensive than bagged goods for the first time ever. The market experts at Heizpellets24 explain this peculiarity as follows: The demand for wood pellets - measured by sales figures - was around 20 per cent higher in February and January 2025 than the quantities sold in the previous year.

Manufacturers and retailers were not prepared for this boom. This meant that there was a significant shortage of supply compared to demand. Manufacturers and wholesalers had obviously significantly underestimated the demand dynamics after a series of months of weak sales and goods were suddenly in really short supply.

The last major wave of wood pellet purchases was in September 2024, according to data from retailers. After that, despite prices falling to their lowest level in three years, customers‘ interest in buying waned considerably and manufacturers’ production was significantly reduced accordingly. However, the shortage was only a temporary phenomenon. There are actually plenty of wood pellets available, say market experts.

Pellet prices falling - a sharp price correction ahead?

At the beginning of the third week of March, wood pellets cost just under 345 euros per tonne on average across Germany. That is 12 euros less than at the beginning of the month. Apparently, prices are already falling shortly before the end of the heating season and are likely to continue their downward trend. It is also a fact that just 4 months ago (November 2024), pellet prices had fallen to their lowest level in 3 years. Wood pellets then became much more expensive. Prices rose by more than 100 euros or 40 % in just a few weeks.

The expectation of many pellet buyers that pellet prices would fall in the first few months of 2025 in a similar way to the previous year was disappointed. However, a correction in pellet prices now seems to be on the horizon. Purchasing behaviour and the market assessment of pellet buyers is dominated by great reluctance to buy: at the beginning of the third week of March, the vast majority of potential pellet buyers on the specialist portal Heizpellets24 believe that it would be better to wait to buy if they still have enough pellets in stock.

According to the data from Heizpellets24, purchasing activity has fallen from ‘medium’ to ‘low’. In addition, the last cold spell with increased heating demand seems to be over for the time being. Delivery times are around 17 days, 3 days less than at the beginning of the month.

At the beginning of the third week of March, prices for loose goods in Germany were more than 345 euros per tonne. Although this is 12 euros less than at the beginning of the month, it is still 98 euros more than in December.

Buyers still have to pay lower prices for bagged goods than for loose pellets for the same purchase quantity. The national average price there is 341 euros per tonne. This is the same price as a week ago, but 4 euros less than the price paid for loose goods.

Source: EPLF