2019 05 08

272 thous. TOE of biomass was purchased in this heating season, which is 8% less than in the previous heating season

In the 2018-2019 heating season, 8% less biomass (272 thous. TOE) was purchased due to a warmer autumn and winter, compared to the heating season of the previous year and the year before. This season, more long-term contracts were concluded. Therefore, the number of contracts decreased by 31% to 2,822 contracts.

“The importance of purchase strategy was particularly underlined during this heating season. When the price of biomass increased in autumn, heat suppliers were under considerable pressure to decide whether to conclude long-term contracts, for fear of historically increasing prices of biomass in winter, or to trust market liquidity and start the winter season without long-term contracts. In October, high biomass prices attracted foreign suppliers’ attention, and their activity contributed to price stabilization in the market and price decrease at the end of the season,” says Vaidotas Jonutis, the head of Trade Division.

According to Jonutis, the most fortunate were those heat suppliers that had not accumulated their entire biomass supply portfolio through long-term contracts for the current heating season and chose a combined purchase strategy.

This year, 18% more biomass (194.4 thous. TOE) was delivered under long-term contracts, and its supply price increased by 32.9% compared to the 2017-2018 heating season. During the period concerned, the amount of biomass delivered under one-week contracts decreased by 41% (to 77.6 thous. TOE) and was supplied at the 10.5% lower price.

The total value of biomass supplied during this heating season increased by 6% (to EUR 56.8 million) compared to the 2017-2018 heating season. In the 2018-2019 heating season, more biomass was purchased by Kaunas (58.9 thous. TOE), Vilnius (50.5 thous. TOE), Šiauliai (33.2 thous. TOE), and Klaipėda (31.7 thous. TOE) counties.

In the 2018-2019 heating season, Latvian suppliers were significantly more active in the biomass exchange. Forty-eight percent of their production was supplied to Telšiai county, 44% was supplied to Šiauliai county, and 8% to Klaipėda county.

During this heating season, the biomass supply to Latvian buyers has risen – the amounts of supplied biomass to Kurzeme, Riga, and Zemgale counties has increased from 36 TOE to 2,028 TOE compared to the 2017-2018 heating season. The biomass was supplied at a 182.67 EUR/TOE average weighted price, i.e. about 19% cheaper than in Lithuania. Latvian sellers supplied the greatest amount of biomass to Latvian buyers at 64%, Lithuanians supplied 30%, and Estonians 6%.

The contracts in biomass exchange during this heating season were concluded by 65 buyers and 106 sellers from Lithuania and Latvia.