Ex-India pellet prices have continued to rise amid sustained high-volume trades on the back of active restocking, but the outlook is more cautious than in earlier weeks based on the possibilities of a downturn in demand following either production cuts or shutdowns by mills in China, SteelOrbis learned from trade and industry circles on Friday, November 10.
Ex-India pellet prices are up $3-6/mt to the range of $134-140/mt CFR China this week, with even one unconfirmed deal reported at above $140/mt CFR.
The sources citing industry estimates said that aggregate trades amounting to 175,000 mt have been concluded over the past week with a southern India-based producer reporting a deal for 50,000 mt at $135-136/mt CFR.
An Odisha-based producer reported a trade for 30,000 mt at $134/mt CFR, while another seller concluded a trade for 40,000 mt at $136/mt CFR, the sources said.
“Both volumes and prices have been very good over the past several weeks, with buyers sustaining large-volume deals. On the supply side too, there is some tightening in availability of fines, particularly from mines in Karnataka in the south, and the robust buying and price is helping local producers to offset higher raw material costs while improving margins at the same time,” a member of the Pellet Producers’ Association of India (PMAI) said.
“However, many have started expressing a more cautious outlook and doubts over a continued uptrend. There is a lot of talk of winter production cuts by mills in China or some taking maintenance shutdowns. If such numbers increase, it will definitely have a depressing impact on aggregate raw material demand. Hence, there are risks of some headwinds emerging in the coming weeks,” he said.