Ex-India pellet prices have been nudged up over the past week by leading local producers to offset rising logistical costs including transportation during current rainy season, but no deals were reported with buyers either on the sidelines or a few others submitting very low bids not acceptable to sellers, SteelOrbis learned from trade and industry circles on Friday, July 4.
Sources said that ex-India pellet prices have increased by $2-4/mt to the range of $100-104/mt CFR China but, with stray bids reported at $95-98/mt CFR, sellers have stayed away from exports, instead preferring to meet robust domestic demand.
With no scope for pushing deals overseas, sellers see no rationale in keeping offers low and have preferred to factor in rising logistical costs and at the same time meet domestic demand where margins are robust and allow plant capacity utilisation levels to be kept steady, the sources said.
“Chinese buyers are remained largely absent. The stray bids are too low. We hear of production cuts by mills in certain regions in China turning the mood even more bearish. Hence, the current bid-offer gap is unlikely to narrow in the short term,” a member of the Pellet Manufacturers’ Association of India (PMAI) said.
“Even after increasing ex-India prices, realisations from local sales are around INR 1,700/mt ($20/mt) better on ex-plant basis. Strong domestic demand will continue to be the focus of pellet producers. Most portside stock have also been diverted for local sales,” he added.