The seasonal decline in demand for Ukrainian pellets in Europe - Strobile Energy

The seasonal decline in demand for Ukrainian pellets in Europe

The seasonal decline in demand for Ukrainian pellets in Europe

Сезонне падінняThe period from March to August is traditionally the best time for the purchase of pellets. Our colleagues in Europe usually say – smart people always make the stock of solid biofuels in spring and summer, benefiting from the reduced level of prices. This trend concerns both wholesale and retail purchases. However, in Ukraine, the market practically stops working during this period. A number of manufacturers almost completely stop delivering product to Europe and work for storage. This feature, of course, is related to the level of quality of pellets in Ukraine: the low quality of the product and a constant level of production and operating costs leads to the low price flexibility.

Dropping price of such pellets is not profitable and at the same time the same price level during the high season and during kow-season just motivate consumers in Europe to buy a product only ad hoc (“on-demand”) and not to freeze the operational capital.

Europe and Ukraine expect the May holidays ahead, which sometimes last for 10 days in Ukraine. Hopefully, Ukrainian producers will spend this time for strategic planning; in fact summer is coming – it is a golden time for wholesale purchases for the next winter.

26.4.2016