Ex-India pellet prices have inched up to touch a seven-month peak, but, in sharp contrast to earlier weeks, trade activity have fallen silent due to the bid-offer disparity amid buyers’ resistance and the lower output forecast from mills in China, SteelOrbis learned from trade and industry circles on Friday, October 27.
Ex-India pellet prices are up $1/mt on the upper end of the range to $129-132/mt CFR China, but bids received were reported not higher than $120/mt CFR, indicating resistance from buyers representing mills in China.
But despite the lack of buying interest from China and the expected fall in Chinese steel output, local Indian pellet producers’ sentiments have been buoyed by the number of inquiries emerging from the Middle East and, though no deals were confirmed, this has allowed the good mood in the market to be sustained even during a week marked by a lull.
“The pause in buying from China was expected as both prices and trade volumes increased too fast in the earlier weeks. Buyers are reassessing raw material requirements, factoring in the expected correction in prices and how much outputs of mills in China will decline by,” a member of the Pellet Manufacturers’ Association of India (PMAI) said.
“Interest from the Middle East is supporting sentiments and prices for now, even though no firm deals have materialized. But it is to be noted such inquiries are generally for long-term (three to six months) supply contracts, which are usually at a discount to spot prices. Hence, it may not directly impact spot quotes from sellers. Of course, it will have an indirect impact from the tightening of exportable volumes available from pellet producers,” he said.