Ex-India pellet prices have consolidated at higher levels over the past week, on back of more activity seen from buyers as business momentum gained after the holiday in China and also supported by fewer suppliers with exportable volumes, SteelOrbis learned from trade and industry circles on October 17.
Sources said that ex-India pellet prices have gained $3/mt to the range of $121-128/mt CFR with the higher end of the range applicable for high grade ore with silica-alumina content less than three percent.
The sources said that some bids were heard even at a high of $130/mt CFR, but no deals were reported at this level, with some in the market seeing this as the first sign of buyers’ resistance.
However, several sellers also maintained that, while the number of active buyers and bids received have increased significantly, the number of successful deals has been limited as a number of pellet producers did not have stocks at ports, having diverted large volumes hinterland for local sales.
An Odisha-based pellet producer reported a very large deal for 120,000 mt split into two lots at an average price in the range of $122-125/mt CFR, the sources said.
Another southern India-based pellet producer concluded a tender-based sale of 50,000 mt, receiving a highest bid of $124/mt CFR, the sources added.
“We currently have all our ready volumes booked for domestic sales, which are fetching a good price. Stocks at ports have all been diverted to local mills in the hinterland. Only a few other producers are active in the export market,” a member of the Pellet Manufacturers’ Association of India (PMAI) said.
“We expect pellet prices to undergo some correction as they have risen very fast and some buyer resistance is inevitable. We will decide our export allocations after the festival holidays next week, by which time a new price direction will be clearer,” he added.