Ex-India pellet prices continued to seek lower levels in tandem with softening of prices of iron ore fines in China and further disincentivising use of higher priced pellets at a time when finished steel prices remain under pressure, SteelOrbis learned from trade and industry circles on Friday, June 20.
Sources said that ex-India pellet prices edged down $1/mt to range of $98-100/mt CFR China but deals were successful with low bids in range of $85-90/mt CFR were not accepted by sellers.
The sources said that local pellet price too showed declines of around INR 300/mt ($3/mt) over the past week, ex-plant Odisha but sales realisations from local sales were still around INR 1,800/mt ($21/mt) higher than export sales, on ex-plant basis, and hence most producers were preferring to divert port stocks to mills in the hinterland.
“With ex-India pellet prices sinking well below the two-month low, we do not see any immediate rebound. Local sales are more remunerative even though volumes and margins are declining slightly compared to two months ago. But we see local sales to be a better option and most producers are diverting port stocks to stockyards inland for better deliveries to local mills,” a member of Pellet Manufacturers’ Association of India (PMAI) said.
“Overall raw material inventories in China are on a higher side as consumption by mills is low. There is little urgency in restocking. At the same time, with finished steel prices under pressure during the rainy season, mills are preferring lower prices fines as feedstock from sufficient port stocks,” he added.