Tag Archives: consumer
UK Remains No.1 Consumer As North American Wood Pellet Exports Hit Record Levels
Wednesday 31 July 2013 09:15 The UK remains the number one destination for North American wood pellets as demand to fuel the nation’s growing number of biomass energy plants is boosting the supply chain. The latest export figures from the two primary pellet-producing regions on the North American continent – the US South and British Columbia – showed increases through early 2013, with the rate of growth now likely to increase further in the second half of the year. In the US South, pellet export volumes to Europe boasted double-digit growth after a brief pause in the fourth quarter of 2012. Export volumes were in excess of 1.7 million tons in 2012, as reported in the North American Wood Fiber Review Canadian exports also rose in 2012 to 1.5 million tons, but this increase was less than that seen in the US During the first quarter of 2013, total pellet exports from North America reached a new record of over 1 million tons for the quarter. This can be compared to the annual shipments of 750,000 tons just four years ago. The United Kingdom continues to strengthen its claim as the primary destination for North American pellets with over two-thirds of the export volume from the US and Canada going to the UK in the first quarter of 2013. Drax’s plans for its large power plant conversion from coal to biomass in Selby has created a stir across North America. Drax Biomass, a new sister company to Drax Power, that will manage North American operations, announced the construction of two pellet plants earlier this spring in the US South which will be sending pellets to fuel the UK facility. Also, in Eastern Canada, pellet producer Rentech announced an off-take agreement with Drax Biomass, which will result in new investment in ports to increase pellet-loading capacity, and in rail transportation, along with the construction and operation of two pellet facilities themselves. The increase in pellet production in Western Canada has pushed sawdust prices upward the past few years, with 2013 prices being about 15 percent higher than they were in 2010, as reported in the NAWFR. In the US South, where smaller logs from thinnings and treetops are commonly used for pellet manufacturing, there has not yet been any region-wide upward price pressure as a result of the new wood-consuming sector in the region. Continue reading
Agriculture: The Good and Bad in a Sector that Looks Cheap*
By Martin Tillier, August 14, 2013 MOS) have borne the brunt of the losses in price as evidenced by a chart of an ETF that tracks them, Global X’s Fertilizer ETF SOIL . This has led many to conclude that there is value to be had there, but the news that caused the big drop at the end of last month is still relevant. The Belarusian Potash Company, a joint venture between Belaruskali and Russia’s Uralkali was unwound. This giant producer had enormous pricing power, and the ending of the cartel has produced a sharp drop in prices around the globe. The problem I see is that artificially high prices have, over the years, resulted in increased supply. This level of supply is still there and, at market pricing, it will be years before the supply and demand equation comes back into balance. In a few months, the recent bounce back may start to look like a pause in a medium term decline in the industry. Long term, it will undoubtedly present some opportunities, but the industry may well have further to fall before that happens. Agricultural supply companies not dependant on potash have also underperformed in general this year and the best value may be found there, but again, not all are equal. Monsanto ( MON ) is a controversial company because of their focus on genetic modification. That may continue to weigh on the stock, but my reasons for staying away have more to do with valuation and the technical look of the chart. The series of lower lows and lower highs evident here is hardly encouraging. Couple that with a P/E over 18 and the company looks, at best, fairly valued. The Good Valmont Industries ( VMI ) is not a pure play on agriculture. Their fabricated metal and coatings products have other applications, but the company was founded on irrigation systems and they are still their best known product. With a global concern about water usage and conservation, their expertise in that area should be invaluable in the future. They are a solid, profitable company and a P/E around 12 looks remarkably cheap. In this case, a bottom seems to have been found just above 130, which, if nothing else, gives a decent stop-loss level. Deere & Company ( DE ) is probably the best known agricultural supply company outside the industry, due to their consumer products division. They too have underperformed massively this year, losing a couple of bucks overall. Assuming continued gradual recovery in the consumer area and growing demand from agriculture, DE also looks good value at a P/E under 10. A more global play can be had by an investment in the IQ Global Agribusiness Small Cap ETF ( CROP ). This fund is actually up around 10% YTD, but has still underperformed the market. The fund’s focus on small cap agricultural businesses around the world makes it more risky than DE or VMI, but it is a pure bet on the growth of agriculture around the world. As demand increases, so technological advancement becomes key, and an investment spread amongst small companies makes it more likely that you will have a piece of “the next big thing” when it comes along. As the stock market continues to move basically sideways, the importance of identifying sectors with potential for growth is exaggerated. In the case of agriculture, the opportunity is there, but it is not universal. Internal dynamics could keep the fertilizer suppliers depressed for some time, but in other areas a simple return to the mean will provide a decent profit. We all eat (some more than others: see my picture above) and the world’s population continues to grow, so demand for the end product of agriculture is assured. It is possible to profit from this, but selectivity is the key. *I cannot tell you how strongly I had to resist the temptation to write a headline about “planting a seed” or “reaping a profit”! Read more: http://www.nasdaq.co…7#ixzz2c3QqpE81 Continue reading
Giving Biofuels A Boost: Collaboration For Bioenergy Development
by Christopher J Brigham 11 July 2013 Ideally, successful biofuel development will rely on existing infrastructure, both to transport the fuel to the consumer and to utilise the fuel to generate power. Christopher J Brigham Partnerships between academia and industry on both sides of the Atlantic are key in bioenergy development, writes the University of Massachusetts ’ Christopher J Brigham… Alternative fuels, especially biofuels, are currently hot topics in both the academic and private sectors throughout the world. In many cases, an innovative idea in academic research will become the next revolutionary industrial process, and in some cases, the next potential global solution. I have previously stressed the notion that the academic scholars of today are the innovators and entrepreneurs of tomorrow. As in spheres such as information technology, space, and economics, the next generation of powerful, marketable ideas in biofuel production and technology will come from the universities and institutes of technology. Scientists, politicians, business leaders, and other citizens from both the US and EU offer a myriad of views on global climate change and how this problem will be mitigated in the coming years. Increasingly, biofuel alternatives to petroleum are being developed, such as the use of sugarcane-based ethanol in Brazil. Ethanol, as an inefficient and somewhat problematic biofuel, is really only effective if the proper infrastructure is developed along with it (which has been done in Brazil). Ideally, successful biofuel development will rely on existing infrastructure, both to transport the fuel to the consumer and to utilise the fuel to generate power. There has been an increased focus in the US on researching cost-effective production of biofuels that are compatible with existing transportation infrastructure. This focus is driven by a renewed focus on funding of scientific research in the US, including the American Reinvestment and Recovery Act (ARRA) , which produces funding opportunities for academic and private sector researchers. ‘Fossil fuel consumption remains high’ In both the US and the EU, fossil fuel consumption for energy remains high. Given the concentrated efforts of EU nations to shift to other sources of energy (wind power, solar energy, biodiesel, etc.), the EU-27 have slowed any increase in petroleum consumption, if not altogether halted it. In the US, fossil fuel consumption has decreased somewhat in recent years, but petroleum-based fuels still dominate the US energy consumption landscape. Keeping in mind the EU and US reliance on foreign sources of oil, uncertainty about the size of a finite supply of fossil-based petroleum, and the increasing demand for renewable products, it makes sense for biofuels to be offered as an alternative fuel source, especially for powering motor vehicles. It should be said that ‘alternative’ fuel source does not mean ‘replacement’ fuel source. We must respect the notion that the Earth’s petroleum supply is large enough to sustain our current habits, perhaps for the entirety of our lifetimes, but also prepare for the possibility that the fossil fuel supply is indeed finite. Academic institutions are major players in biofuels research innovation. Many patents and other intellectual property have been developed as a result of academic research on bioenergy. Currently, programmes like Advanced Research Projects Agency – Energy (ARPA-E) in the US are funding innovative and transformative research in many different aspects of the energy space, from biofuels to rethinking the way the energy grid operates. Similar programmes have been established in the EU, focusing on valorisation of waste biomass, biodiesel production, and other relevant topics. While funds from these programmes go mainly to academic institutions, fostering the next wave of innovation, there is also opportunity for partnership with the private sector. This could be crucial for the development of ideas in bioenergy and bringing them to market. Transatlantic collaboration I propose a partnership in biofuels research and development that has been largely underexplored, if not unexplored: the opportunity for US and EU universities to work together to address the challenge of creating an affordable and efficient bioenergy infrastructure. In a global economy, continued cooperation among respected global institutions is a must. A pooling of resources between the US and EU could have economic and even political advantages for the nations involved, and could help shape the energy future on both sides of the Atlantic. Christopher J Brigham PhD Assistant Professor University of Massachusetts Dartmouth www.umassd.edu [This article was originally published on 1 st July 2013 as part of Science Omega Review Europe 02] Read more: http://www.scienceom…t#ixzz2Yk2V4ZrS Continue reading
