Biomass Exchange review – March 2020

The increased turnover of the exchange signals the start of new long-term transactions and expiry of earlier ones

In March, the price of woodchips at the Baltpool biomass exchange changed only slightly compared to February: the decrease was only 0.5% with the price at 115.58 EUR/TOE (9.94 EUR/MWh). The turnover has nearly tripled in March (from EUR 1.953 million to EUR 5.825 million), which was due to the increased trade under long-term contracts for the warm season and the first transaction for the 2020–2021 heating season concluded in Utena County for 125 EUR/TOE (10.745 EUR/MWh); the price was 17.5% lower compared to the 2019–2020 heating season. The increase in the turnover was also due to the expiry of transactions for the 2019–2020 heating season, which has resulted in the increased SPOT sales.

In March, market participants purchased 49,862 TOE (576.41 GWh) of biomass via the biomass exchange, i.e. more than triple amount compared to February (16,058 TOE or 186.75 GWh). The greatest share (54%) was purchased under SPOT contracts; 19% accounted for one-month contracts, 5% accounted for one-quarter contracts and 22% were half-year contracts. As mentioned above, the weighted price under the concluded transactions for woodchips in March has changed only slightly and decreased by only 0.3% from 115.97 EUR/TOE (9.97 EUR/MWh) to 115.58 EUR/TOE (9.94 EUR/MWh), but, compared to last year, the price under transactions for woodchips decreased by 18% (from 140.80 EUR/TOE or 12.10 EUR/MWh).

In March, the BWCS LT index was the lowest since its first publication on 19 March 2018 (105.94 EUR/TOE or 9.11 EUR/MWh on 10 March 2020). However, on the auction that followed, the index increased by 10% and reached 117.53 EUR/TOE (10.11 EUR/MWh), which was mostly due to the nearly doubled demand (from 3,699 TOE or 43.02 GWh to 8,110 TOE or 94.32 GWh); the change during the auction of 17 March 2020 may also have been affected by the start of the quarantine announced due to COVID-19. Despite the fact that the index increased once again to 119.77 EUR/TOE (10.30 EUR/MWh) during the succeeding auction, the value dropped to 113.35 EUR/TOE (9.75 EUR/MWh) during the last auction of the month.

In March, the demand for biomass deliveries under transactions concluded via the Baltpool exchange decreased by nearly 1.5% compared to February (43,625 TOE or 507.4 GWh). A total of 42,989 TOE (499.96 GWh) of biomass was delivered in March, which is a 10.5% decrease compared to March 2019 (48,058 TOE or 558.91 GWh). The price of delivered biomass in March 2020 decreased by 3% compared to February (from 141.14 EUR/TOE or 12.14 EUR/MWh to 136.84 EUR/TOE or 11.77 EUR/MWh). In March 2019, biomass was delivered for a price that was 26% higher (184.99 EUR/TOE or 15.91 EUR/MWh) compared to March 2020. In March, unlike February, biomass was supplied under SPOT and long-term transactions in nearly equal shares (38% and 39% respectively); the remaining amount was distributed in similar shares between monthly and quarterly transactions.

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