📈High oil prices will benefit the demand for biomass pellets!
Enhanced substitution effect: When the price of oil and natural gas is high, the cost-effective advantage of biomass pellet fuel becomes prominent. Analysis shows that the comprehensive operating cost of biomass pellet fuel is about 31% of fuel and 56% of gas. The higher the oil price, the stronger the willingness of downstream users to turn to biomass pellets.
Drive equipment procurement: The increase in downstream demand for biomass fuel will attract more capital to invest in production, thus driving the demand for pellet mill equipment. This logic is also reflected in the field of oil and gas equipment - high international oil prices will stimulate active procurement of related equipment.
Generally speaking, if you use an electric pellet machine to produce biomass fuel, rising oil prices will be more beneficial than negative for you; but if you use a diesel engine to drive equipment, you need to focus on accounting for the cost pressure caused by rising oil prices.
