Ex-India pellet prices have resumed their downtrend reacting to renewed pessimism in China and apprehensions of oversupply and reports of a cancellation of a tender-based export offer by a local seller, SteelOrbis learned from trade and industry circles on Friday, August 19.
Ex-India pellet prices have lost ground and hit $100/mt CFR China, compared to $100-105/mt CFR two weeks ago.
According to the sources, even though mills in China were heard to be planning output increases from blast furnaces and the prices of pellets had fallen to close to par with iron ore fines prices, mills have still been averse to committing fresh bookings.
One of the reasons cited for the lack of bookings in the local market was that trade importers were cautious due to higher-than-average stocks at ports in China.
In the local market in India, sentiments became very bearish following the cancellation of a 20,000 mt export tender floated by a pellet-producing arm of an integrated mill. Though no reason was officially cited for the cancellation of the tender, the market speculated about the absence of bidders.
“Current export prices offer no positive returns for the seller after levy of the 50 percent export tax. I don’t think a producer will be looking at sales overseas unless the price is supported at $130-140/mt CFR,” a member of the Pellet Manufacturing Association of India (PMAI) said.