Key features
- South Korea and Japan are the two largest import markets for wood pellets from Vietnam. The amount of wood pellets exported from Vietnam to these two markets accounts for over 95% of the total amount of wood pellets exported from Vietnam to all markets.
- The difference in the source of raw wood for producing wood pellets exported to South Korea and Japan includes: wood pellets exported to South Korea are mainly made from wood by-products of the wood processing industry such as sawdust, shavings, and excess wood scraps. Wood Pellet enterprises exporting to South Korea are mainly located in the Southeast region, where wood manufacturing factories are concentrated. Wood pellets exported to Japan require the source of wood materials from domestically planted forests with FSC certification. This material is only available in places with a large concentration of planted forest areas in Vietnam, especially from the Central region to the North.
- Starting from the second quarter of 2022, the export market for wooden furniture will decline. By-products of the industry as raw materials for wood pellet production will also decrease. This will create a shortage of raw materials for wood pellets exported to Korea.
- The energy crisis caused by the Russia-Ukraine conflict has caused the demand and price of wood pellets in the world market to increase sharply. This has created a wave of investment in wood pellet production not only in Vietnam but also in other countries. This wave increases competition between wood pellet enterprises in Vietnam and between Vietnamese enterprises and enterprises in other countries such as Malaysia, Thailand and Indonesia in the future.
- In early 2023, the Korean market will fluctuate strongly. The price of wood pellets exported to Korea from Vietnam fell below 90 USD/ton (FOB) in April, below the production cost of many enterprises. Many enterprises, especially small-scale enterprises, have to stop operating. Import volume has also decreased sharply.
- In the first 5 months of 2023 , the volume of wood pellets exported from Vietnam to Korea reached 0.65 million tons, equivalent to 96.1 million USD in turnover, down 41% in volume and 45% in turnover compared to the same period in 2022.
- The Japanese market has high stability in both volume and price. In the first 5 months of 2023, the volume of wood pellets exported from Vietnam to Japan reached 0.87 million tons, with turnover reaching 151 million USD. The export volume decreased by 5.7% while the turnover increased by 19.7% compared to the same period in 2022.
- It is forecasted that in the last months of 2023, the production and export situation of Vietnam’s wood pellets will not have many fluctuations. Specifically :
- (a) The volume and price exported to Korea will increase, following the current trend, but will not increase dramatically.
- (b) The volume and price exported to Japan will be stable.
- (c) Competition for raw materials to produce wood pellets for export to Korea will continue to increase because the export market for wood products has not shown signs of recovery.
Note: The information in this article is for reference only and may change depending on the manufacturer and source of raw materials. For the most accurate information, you should consult experts, wood pellet suppliers or contact Overc.vn to answer your questions and problems related to wood pellets and wood chips.
Source:
- Hawa
- Overc Team synthesise, analyse and write articles.
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OVERC was established in Vietnam, which has 17 FTA (Free Trade Agreement).
Vietnam is one of the countries with the most FTAs in the world.
Our main activities are manufacturing and distributing Wood Pellets and Wood Waste. Our wood pellet products, which are made from Acacia veneer residual 100% or wood waste (logs, sawdust, wood chips, wood shavings,…), have been exported to many countries around the world such as Japan, Korea, EU, etc.
OVERC Co.,Ltd would like to wish you all the best at this time.
For more information on our products, please visit our website at OVERC.VN – Renewable World.