Ex-India pellet prices have edged down slightly over the past week as the market mood has become very cautious with buyers from China withdrawing and sellers holding back from deals, resulting in silent trade conditions, SteelOrbis learned from trade and industry circles on Friday, March 27.
Sources said that ex-India pellet prices are down slightly by around $1/mt to the range of $113-118/mt CFR China, with the price at the higher end of the range applicable for high grades with silica-alumina content less than three percent.
According to the sources, demand has weakened with buyers from China retreating as mills have not been interested in immediate import bookings owing to sufficient stocks as well as expected declines in exports in the face of geopolitical turmoil.
At the other end, for sellers, freight costs remain the biggest concern and the widening gap between FOB and CFR prices, reflecting that margins for exporters are under strain.
According to an official at an integrated mill operating a pellet plant in eastern India, current FOB-based prices would be in the range of $101-105/mt, which is not considered viable against the backdrop of sustained robust domestic sales and prices.
It was pointed out that domestic sales realizations are around INR 1,400/mt ($15/mt) on ex-plant basis, higher compared to exports, improving from INR 1,200/mt ($13/mt) over the past week.
“Mills in China are prioritizing domestic raw materials over imports, largely because of concerns over freight rates and also local raw materials facilitate better cost control,” a member of the Pellet Manufacturers’ Association of India (PMAI) said.
“Exporters are holding back deals as margins are not improving, while domestic prices remain steady. Some negotiations are taking place as we expect some trade revival in the coming week,” he added.