Ex-India pellet prices have showed a marginal decline over the past week and, even though attempts to conclude a few deals were unsuccessful, the number of sales under negotiation has improved with sellers increasing volumes offered for export to balance the fall in domestic off-take and rising inventories, SteelOrbis learned from trade and industry circles on Friday, June 5.
Sources said that ex-India pellet prices have showed a marginal loss of around $1/mt to the range of $115-118/mt CFR China, with the price at higher end of the range applicable for high grades with silica-alumina content less than three percent.
According to the sources, a deal for an estimated volume of 50,000 mt fell through after the seller withdrew following bids received at $115-116/mt CFR.
It was pointed out that there are signals that mills in China are shifting toward pellets as feedstock to improve operational efficiencies, which has been reflected in more buyers actively negotiating fresh import bookings.
At the same time, off-take of pellets by local mills has been declining and producers have been reducing domestic sales prices over the past several weeks. As a result, local sales margins are just about INR 200-300/mt ($2-3/mt) higher than export realizations on ex-plant basis.
Trade circles said that pellet producers have restocked large volumes at port stockyards as export allocations are being increased to partially offset lower local sales and higher inventories at inland stock yards. These volumes are now under sales negotiation at the benchmark price range of $119-122/mt CFR, triggering an optimistic outlook on the export front.
“The Indian pellet market is cooling down very fast. The export market is relatively more stable even if the upside potential may be limited. The finished steel market is weakening in India and mills are curtailing use of higher-priced pellets. Pellet producers for their part are taking a serious relook at increasing export allocations and restocking port stock yards,” a member of the Pellet Manufacturers’ Association of India (PMAI).
“A more definitive trend on exports will become clear over the next one week, once reports of deals based on ongoing negotiations trickle into the market,” he added.
