One year ago, on 19 March 2018, the energy exchange operator Baltpool, which is part of the EPSO-G Group, started publishing the Baltpool Wood Chips Spot Lithuania (BWCS Lithuania) price index.
Over the past year, the BWCS Lithuania index has become an objective tool for evaluating changes in the woodchip prices and the market situation and an important measure for forming a transparent and competitive biomass market in the country.
“Thanks to the BWCS index participants can evaluate the forming prices of one-week transactions, and buyers can with more ease forecast prices of short-term transactions and adjust their buying strategies based on that,” said Andrius Smaliukas, director general at Baltpool.
According to him, the index is very useful for concluding bilateral contracts, developing pricing strategies within individual companies and conducting market research.
The calculation of the BWCS Lithuania index is based on all one-week woodchips supply transactions concluded at the exchange. The BWCS Lithuania index is published on a weekly basis, immediately after a trading auction is completed (on the second business day of each calendar week).
The index is developed with consideration of the principles of financial benchmarks published by the International Organisation of Securities Commissions (IOSCO). Baltpool orders an independent audit of the calculation of the value of the index on an annual basis and publishes the audit conclusions.
One third of the biomass sold over one year at the biomass exchange was sold under one-week contracts (135.1 thousand TOE). Considerable biomass price fluctuations were recorded in the course of the year after the introduction of the index: the highest index price of 210.78 EUR/TOE was recorded on 2 October 2018, while the lowest index value of 126.19 EUR/TOE was recorded on 2 May 2018, with the difference between the two amounting to 67%.
At present, 347 participants, of which 53 are from Latvia, are registered with the Baltpool biomass exchange.