Graanul - comment

Graanul reported its Q3 results, which were broadly in line with expectations. Demand for wood pellets has strengthened since the start of FY25, although uncertainty remains across Europe. Geopolitical tension continues, with the United States imposing tariffs on wood pellets from Vietnam, Canada and the European Union, leaving the global market uncertain.

In Europe, uncertainty persists regarding the United Kingdom’s post-2027 biomass subsidy framework. The new Drax CfD, agreed with the UK government earlier this month, should encourage discussions between utilities and suppliers on long-term offtake agreements beyond 2027. For now, bond investors remain in limbo as the outcome of these negotiations is unclear. However, we expect negotiations to take place during 2026, as the current deal expires in December 2026.