Ex-India pellet prices have been pushed up over the past week as buyers from China returned to the market after the Labour Day holiday, but no deals have been confirmed, with buyers waiting for prices to settle down, while sellers have increased offer levels being optimistic of a consolidation once business activity gains momentum next week, SteelOrbis learned from trade and industry circles on Friday, May 8.
Sources said that ex-India pellet prices have gained around $2/mt to the range of $116-121/mt CFR China with the higher end of the range applicable for high grades with silica-alumina content less than three percent.
According to the sources, buyers returning to the market have been putting in cautious bids, anticipating prices will settle, while sellers for their part have been more bullish, expecting prices to increase as more buyers return to the market, based on reports of “good steel output levels” in China.
Following the improvements in ex-India pellet prices, margins from exports have increased by around INR 300/mt ($3/mt), but are still lower than margins from sales in the local markets. This has prompted sellers to hold back volumes awaiting a further consolidation of export prices.
However, sources said that at least two of the largest pellet producers are heard to be replenishing volumes at port stockyards, indicating a positive outlook for overseas sales.
“Buyers are returning but still not in full force. This is an early stage of recovery. Once business activity resumes fully, we expect bids to improve too. We expect firm deals to emerge over the next week,” a member of the Pellet Manufacturers’ Association of India (PMAI) said.
“Sales volumes in the local market are plateauing. This is likely to prompt producers to increase activity on the export front as prices consolidate a little higher to around levels of $225-230/mt CFR,” he added.
