Ex-India pellet prices have remained largely stable amid a surge in trading volumes on the back of active restocking by mills in China, reacting to a possible economic stimulus in China and also the tightening of local supplies, SteelOrbis learned from trade and industry circles on Friday, July 21.
While ex-India pellet prices have remained almost stable at $117-120/mt CFR, versus $117-118/mt CFR last week, the industry estimated the total trade volumes during the week surged to around 350,000 mt as both the number of deals and deal sizes increased.
The sources said that pellet plants’ stocks at port stockyards have fallen and hence lead times for shipments have increased owing to longer transportation times from plants to ports during the current rainy season. However, according to the sources, prices have remained stable, possibly because most large-volume trades are confirmed towards the close of the week and prices would “react with a lag”.
An Odisha-based pellet plant has reported a trade for 50,000 mt of high-grade pellet with alumina content less than three percent at $118/mt CFR China and another tonnage of 30,000 mt at $117/mt CFR.
Another pellet-producing arm of an integrated steel mill has confirmed a deal for 50,000 mt at $119/mt CFR, the sources said.
“Buyers representing mills in China have been very aggressive in bookings over the past three days. Firstly, with ex-India prices remaining stable, the price differential with high grade fines currently averages around $2/mt, prompting mills to prefer pellets as feedstock. Secondly, we hear that, with the drawdown on port stocks in China estimated at 0.5 million mt over the past week, some mills are having to look at seaborne cargoes to restock,” a member of the Pellet Manufacturers’ Association of India (PMAI) said.
“The impact of surging trade volumes on prices is expected to be evident next week. Most of stocks at ports have been committed against recent bookings. Most likely fresh tonnages from plant to port stockyards will be quoted higher when new offers are submitted next week,” he said.