Ex-India pellet prices have edged down over the past week, with demand patterns showing divergent trends, with buyers from China staying away from booking lower grades, while robust trade volumes have been seen for higher grades, SteelOrbis learned from trade and industry circles on Friday, June 26.
Sources said that ex-India pellet prices have lost around $2/mt to $112-115/mt CFR China with the price at the higher end of the range applicable for higher grades with alumina-silica content less than three percent. Significantly, few trades for higher grades were reported at a premium owing to tighter supplies during the current monsoon season and sellers seeking to leverage the situation.
An Odisha-based pellet producer concluded sales of an estimated 120,000 mt in two separate deals for the highest grade with silica-alumina content less than 1.5 percent at $123-124/mt CFR, sources said.
Another southern India-based producer sold 50,000 mt of high grade pellets at $115-118/mt CFR, the sources added.
It was also pointed out that, from the sellers’ point of view, domestic sales realizations for lower grades have continued to remain higher, prompting lower volumes being offered for export. On the contrary, in the case of higher grades, sellers have been able to charge a premium since, not only is demand robust, but supplies of higher volumes were very tight owing to sporadic disruptions caused by monsoon rains.
“The demand and sales patterns differ. Chinese buyers are continuing to show good interest in higher grades but are not concluding deals for lower grades. The seller is getting a better price in local sales and is restricting export volumes of lower grades while maximizing exports of higher grades, which are often being sold at a premium,” a member of the Pellet Manufacturers’ Association of India (PMAI) said.
“There is a broader weakness in the raw material market. It cannot be solely supported by demand for higher grades. Hence, producers are cautiously awaiting more clarity on the overall price trends,” he added.
