It is undoubtedly clear that the year 2021 for waste wood will go down in history. Whereas the industry had expected the pandemic to have a much shorter-term impact on volumes at the start of the pandemic in March 2020, the waste wood market was hit specifically in the second half of 2021 and thus a year later. The fact that the waste wood market is constantly changing and evolving is nothing new, but the speed and dynamics are causing some headaches.
The first half of 2021 was surprisingly less turbulent. Quarter one, which is known to be critical, was mastered confidently and optimism was felt for springtime, especially since Easter is considered to be a turning point in terms of volume. Better weather conditions, the first power plant shutdowns, and dry fuel usually ensure a stable volume of waste wood, and in some cases even a significant volume surplus in the summer. This year, the volume surge failed to materialize. A very stable demand from the wood-based panel industry ensured that the processing sites were always empty. It became clear relatively quickly that overhauls of the power plants were used to replenish the stock at the power plant instead of cancelling the quantities to the upstream suppliers.
While sites also did not fill with waste wood over the summer vacations, hopes were high for a turnaround in late summer. In the past, shutdowns again caused increased volumes. But in 2021, everything was different. At the beginning of the fourth quarter at the latest, the available volumes once again collapsed significantly and prices at material and thermal recyclers rose steadily. The crux of the matter with waste wood is that, from experience, higher recycling prices do not result in more waste wood being produced by the primary producers. Quite the contrary. One has the impression that awareness of wood as a raw material has increased significantly this year. Due to the shortage of timber in the middle of the year, carpenters, for example, are now thinking twice about what to do with their waste wood. The waste disposal company is usually at the back of the queue at the moment. The only advantage for the industry was the favorable holiday period around Christmas and New Year. The logistics chains were more stable than in other years.
So now the well-known competitive quarter one lies ahead again, and there would be plenty of reasons to paint a bleak picture. But it would be fatal to enter the new year with these short-term thoughts. The market participants know about the volatility of the waste wood market. In the past, it has been proven that the biggest mistake is to believe that things will always go on like this. In our opinion, the factors for the assessment of the market have become much more complex. EEG, RED II, electricity prices, imports and exports, coal phase-out, development of the particleboard industry and new power plant projects are just a few of many important as well as complex issues that will decisively steer the waste wood market.
Given this complexity, it would be risky to venture a reliable forecast of market developments. Instead, the many factors ensure that we at the Brüning Group are very vigilant in order to set the right course at an early stage. Regardless of this, the waste wood unit has planned an expansion to 670,000 t for 2022, after 550,000 t of waste wood were traded in 2021.
In any case, we are looking forward to the next crazy year with waste wood, in which everything will again be different than we imagine today.
