A slight early recovery in ex-India pellet export prices has not been sustained and prices have settled lower on week-on-week basis on a combination of a hardening of lockdown conditions in China, a softening of the futures market, and steel mills expecting headwinds in attempts to push up output, SteelOrbis learned from trade and industry circles on Friday, April 8.
Early trade prices for ex-India pellets were reported in the range of $170-175/mt CFR China compared to $165-170/mt CFR last week, but have settled lower at $160-165/mt CFR by close of the week.
However, local sellers have maintained an optimistic outlook on the assessment that mills in China will persist to increase output despite pandemic challenges and this would limit any further downside risk to prices, prompting a number of sellers to hold back volumes for overseas shipments.
“The soft market conditions over the past fortnight are largely because of negative sentiments over the pandemic’s impact in China and not being sustained by buying from alternative emerging markets in the Gulf and EU, at least not as much as was seen early last month,” a member of the Pellet Manufacturers’ Association of India (PMAI) said.
“However, pellet exports are not in a bear market, but just hit by short-term poor sentiment. The next recovery in futures will revive seaborne trade. For local sellers it is a strategic wait,” he added.
A trade early in the week for 20,000 mt was reported by an Odisha-based pellet producer for June shipment at $170-173/mt CFR.
However, thereafter prices softened like a deal for 25,000 mt for the end of May concluded by a Chhattisgarh-based pellet producer at a price of $158-160/mt CFR, trade sources said.