Ex-India pellet prices have suffered major setbacks in the past week, with even a few large-volume deals fetching prices lower than sellers’ expectations as China-based buyers have become cautious ahead of the long holiday and the weakening local prices of fines, SteelOrbis learned from trade and industry circles on Friday, February 6.
Sources said that ex-India pellet prices have declined by a range of $5-7/mt to the range of $112-115/mt CFR China, with the price at the higher end of the range applicable for the highest grades with silica-alumina content of less than three percent.
However, the sources said that, while sellers have been pushing higher grade pellets for overseas sales, most deals have been restricted to regular grades, with buyers concluding deals at low price levels.
For example, an eastern India-based seller concluded a deal for 70,000 mt at $111-112/mt CFR, while another tonnage of 50,000 mt was sold at $112-113/mt CFR, the sources said.
“Some deals were closed successfully, but even large volumes are being sold at lower levels. Buyers are not willing to pay a premium for higher grades and most of the sales were for regular grades. The weak price of fines in China is also impacting the price of imported pellets,” a member of the Pellet Manufacturers’ Association of India (PMAI) said.
“Mills in China are not willing to pay a higher price for premium raw materials like pellets ahead of the holidays. Mills are restocking only if prices are low or are preferring lower-priced fines. Sellers will have to wait for a new pricing trend to emerge after the holidays in China to decide future sales offer volumes,” he added.
It was pointed out that, following the decline in ex-India prices, the gap between local sales realizations and exports has widened to around $15/mt on ex-plant basis.
“A large proportion of our pellet plant is being diverted for captive consumption and we are reducing exportable volumes. The proportion up for export will be reassessed once the export market improves,” an official at an integrated steel mill operating a pellet plant in Odisha said.