Ex-India pellet prices have softened marginally in the past week in the absence of any buyers in the market owing to the Labour Day holiday in China, with sellers continuing to focus on domestic supplies offering better margins, SteelOrbis learned from trade and industry circles on Monday, May 5.
Sources said that ex-India pellet offers are down $1/mt to the range of $106-107/mt CFR China, with a few offers at an additional discount of $2/mt for lower grade pellets (silica-alumina content of 4-5 percent and above), but deals were still not confirmed in the market.
The sources said that the expected pre-holiday restocking of pellets did not materialise as mills in China lacked confidence in bookings of higher-priced raw materials amid the overall weakness of finished steel prices.
“Local pellet producers are not pushing offers overseas as prices are not good. Local supplies are offering better prices and it is better to wait for any recovery post-Labour Day holiday later in the week,” a member of the Pellet Manufacturers’ Association of India (PMAI) said.
“But most pellet producers have diverted port stockyard inventories to supplies to local mills in the hinterland. Many producers have taken note of the weak manufacturing growth in China and expectations of a price recovery are very muted. Mills will continue to depend on port-side stocks in China and reduce exposure to seaborne cargoes. Hence, Indian pellet producers to not see rationale in incurring additional costs in maintaining inventories at ports,” he added.