Ex-India pellet prices have staged a recovery over the past week on the back of a rise in global iron ore prices, but trade activity has remained muted with buyers showing resistance and sellers awaiting further consolidation while focusing on better local sales realizations, SteelOrbis learned from trade and industry circles on Friday, November 21.
Sources said that ex-India pellet prices have gained around $3/mt to the range of $114-119/mt CFR China, with price at the higher end of the range applicable to high grades with silica-alumina content less than three percent.
According to the sources, two or three trades were heard in market circles at $115-117/mt CFR but the details were not known as sellers declined to confirm the sales.
It was pointed out that, even though the gap between local and export sales has narrowed, it is still in favor of the former with local sales fetching about INR 1,200/mt ($14/mt) higher than overseas sales on ex-plant basis.
This has prompted most large sellers to keep pushing volumes in the local market and holding back exportable volumes until further consolidation in ex-India prices.
“The rebound in ex-India prices is because of improvements seen in prices of iron ore fines in China. But mills are not restocking pellets aggressively. There is a certain amount of resistance to the recent rise. Also, we hear port stocks in China are on the higher side. These factors will offer headwinds to a further uptrend,” a member of the Pellet Manufacturers’ Association of India (PMAI) said.
“Large producers are not worried. There is sufficient local demand and the price is good. They can afford to wait as far as overseas sales are concerned,” he added.