Ex-India pellet prices have continued to inch up in the past week and the gap with local prices has narrowed but is not sufficient for sellers to shift their focus from domestic sales to exports and deals are heard to have been deferred until further consolidation of prices, SteelOrbis learned from trade and industry circles on Friday, November 29.
Sources said that ex-India pellet prices have gained $2/mt to the range of $112-114/mt CFR China amid support from increases in global iron ore fines prices.
The gap with domestic sales prices has narrowed to around INR 1,200/mt ($14/mt), which is the difference between the FOB-based price and the ex-plant local sales price. According to the sources, despite two consecutive weeks of hardening of ex-India prices and the narrowing of the gap with local sales prices, sellers are still not finding it attractive to push sales overseas.
The sources said that at least two bids at around $114/mt CFR were turned down by Odisha-based pellet producers, with the latter seeking fresh negotiations in early December and waiting for further consolidation of prices in December.
In fact, a southern India-based government-run pellet producer has diverted 50,000 mt earlier marked as export allocation to local sales, the sources said.
“As of now, the export market is picking up but not so much as to offset the benefits the sellers are getting in the domestic market. Sellers are looking at a price upside of $118-120/mt CFR before resuming overseas sales,” a member of the Pellet Manufacturers’ Association of India (PMAI) said.
“There is a rationale for deferring exports. The price is expected to gain in December triggered by restocking ahead of the Chinese New Year holidays in February 2025. The gains that we have seen over the past two weeks are ‘paper gains’ from the hardening of futures. This is expected to translate to gains in the physical market going forward, next month,” he said.