Indian pellet exports market lapsed into a bearish trend over the past week with prices extending losses on further weakening of demand from China amidst fears that production cuts will be extended rather than sintering restrictions during coming winter months, SteelOrbis learned from trade and industry circles here on Friday, October 29.
Sources said that ex-India pellet prices were down to levels of $150-160/mt CFR China from trades concluded in the range of $160-165/mt CFR a week ago, on sharp fall in trade volumes and deals.
According to the sources, reports received in the local market indicated that fresh rounds of production cuts imposed on Chinese steel mills to check air quality during winter months will significantly impact raw material demand. This is contrary to expectations that wide restrictions on sintering would have prompted more mills to shift from lower grade iron ore lumps and fines to pellets.
“Sintering restrictions would have triggered a shift in demand from lumps, fines to pellets as seen in earlier years during winter season. But China is seemingly going in for more drastic measures of production cuts this time and dampening demand projections,” a member of Pellet Manufacturers’ Association of India (PMAI) said.
“Local pellet producers are seeking alternative markets in South Korea and Middle East but volumes in these regions are still on the lower side and not expected to offset losses in trades from China,” he added.
Sources said that a pellet producing arm of Jindal Steel and Power Limited (JSPL) was heard to have concluded a deal for 25,000 mt with a China based trading firm at price of $150-155/mt CFR for end December delivery.
An Odisha based pellet producer reported a trade for 30,000 mt with a Singapore based mineral trading firm at $150/mt for January delivery, the sources added.