Ex-India pellet prices have improved over the past week riding on the back of the firming up of iron ore fines and futures prices in China, but no deals have been confirmed as sellers have been holding back expecting a further consolidation and higher realisations compared to domestic sales, SteelOrbis learned from trade and industry circles on Friday, January 17.
Sources said that ex-India pellet prices have increased by around $5/mt to the range of $111-113/mt CFR China, but most local producers are giving offers in the range of $115-118/mt CFR and the gap has resulted in a lack of trade activity.
According to the sources, while the firming up of ex-India prices has narrowed the gap between export and local sales realisations, it is still not attractive enough for sellers to push sales overseas.
The sources said that sellers are looking at a price consolidation to levels of around $120/mt CFR, which would bring it to a par with local sales realisations, before making export allocations and resuming the stocking of volumes at portside yards.
“A government-run pellet producer has floated an export tender for 50,000 mt which is to close early next week. All eyes are on this tender and the level of bids received. This, together with performance indices in China, will determine the next sales move by local sellers,” a member of the Pellet Manufacturers’ Association of India (PMAI) said.
“Next week is crucial for the short-term trend. We expect another round of rebounds triggered by restocking in China ahead of the Lunar New Year holiday later in the month. However, on a note of caution, it needs to be pointed out that some mills have already competed restocking and hence any price consolidation will be limited. A stronger price consolidation is more likely post-holiday in China,” he added.