Ex-India pellet prices have continued to be nudged up by local sellers in anticipation of revived demand post-Labor Day holidays in China, but deals are still elusive, with buyers sitting on the fence, SteelOrbis learned from trade and industry circles on Friday, April 25.
Sources said that ex-India pellet offers have increased by $3/mt to the range of $107-108/mt CFR China, prompted by the stable price of fines in China and continued robust domestic sales prices and demand.
According to the sources, sellers have been confident of a demand revival in China after the Labor Day holiday and even some restart of restocking ahead of May 1.
At the same time, considering the “good price and demand” coming from local mills, some sellers have been hiking offers but holding back deals awaiting price consolidation and the expected return of buyers in making deals.
It was pointed out that, after ex-India pellet prices being pushed up for two consecutive weeks, the differential between export and local sales margins contracted to around INR 1,800/mt ($21/mt) from INR 2,100/mt ($25/mt) a week ago, but it is still sufficient to prompt sellers to hold back deals and await the consolidation of export prices.
“The sentiments on the export front are improving and prices will see further gains ahead. Buyers are on the fence, but further gains will bring them back into the market, and price gains will be matched with better trade activity,” a member of the Pellet Manufacturers’ Association of India (PMAI) said.
“However, we can see much more aggressive and intense buyer-seller negotiations ahead. Buyers will still be forced to be cautious as finished steel margins in China remain under pressure. Sellers will get support from local demand-price dynamics and not be forced to finalize contracts in a hurry,” he added.