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Pellet Manufacture and Trade

Profit margins for sellers of pellets are typically not very high, at around 15 percent on average, since for a majority of manufacturers producing pellets is not the company's core business but merely an “add-on” to an existing forest products business. A higher price can be obtained for pellets than for sawdust, but most producers refrain from exporting and accessing higher prices in foreign markets due to shipping costs. Some U.S. manufacturers have indicated that they were contacted by potential buyers as far away as Sweden, China and the Czech Republic. Japan is a common export destination.

Regulations in Canada are unique in that sawdust and other wood wastes are not allowed to be disposed in landfills. This has encouraged their forestry companies to establish their own pelletization plants making them a rising international player in pellet production.

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