Ex-India pellet prices have continued to edge up over the past week, riding on active inquiries from buyers in China and market confidence from recent large-volume deals, but extremely tight exportable volumes have stalled any new deals during the week, SteelOrbis learned from trade and industry circles on Friday, September 26.
Sources said that ex-India pellet prices have gained around $1/mt to the range of $117-124/mt CFR, with the price at the higher end of the range applicable for high grades with silica-alumina content less than three percent. Even though no new deals were reported in the past week, as producers have very few volumes at port stockyards, several exporters are optimistic of deals emerging in the coming days.
These exporters said that the current price is very close to exporters’ target prices of $125-130/mt CFR, which could be achieved by the time the festival holidays are over and bookings for November deliveries commence.
Sources said that buyers representing mills in China have been very active and have been submitting bids in the range of $118-120/mt CFR, but lack of supplies has been stalling actual deals.
It was pointed out that domestic prices exceeded export realizations by around INR 1,000/mt ($11/mt), and, even though the gap has narrowed, local pellet producers are still focused on domestic sales and hence have diverted most of their exportable stocks at ports.
“Chinese buying interest is expected to pick up even more with restocking emerging ahead of the National Day holiday. But supply-side tightness will keep export sales limited,” a member of the Pellet Manufacturers’ Association of India (PMAI) said.
“As per our calculation, by the time the National Day holiday in China is over, which will also just about coincide with the end of the festival holidays here, ex-India pellet prices may have consolidated in the range of $125-130/mt CFR, which would be attractive enough for local pellet producers to become more active in offering higher volumes overseas, leading to more activity on the export front,” he added.
