Ex-India pellet prices remained under pressure inching lower but the pace of the fall was restricted by hopes of steel output cut in China would be lower than anticipated with both buyers and sellers deferring deals for a clearer picture to emerge, SteelOrbis learned from trade and industry circles on Friday, August 18.
Ex-India pellet price was down a marginal $1/mt average to the range of $104-107/mt CFR China but no deals were recorded with no offers or bid reported over the past week.
The sources said that even though there has been some reduction in medium term lending rates in China to spur economic growth, revival of the deflationary economy is still in doubt, prompting interest in seaborne raw material to be at a very low level.
However, losses in pellet price are limited as possibilities of a drastic production cut by mills in China are discounted. But at the same time, with sharp upturn in demand also being discounted, raw materials demand and price are expected to remain under pressure, offering strong headwind to the market.
“We received reports of port pellet stocks in China falling below the 5 million mt mark, the lowest over the past 12 months. But we do not expect any restocking or revival of trade activity on the exports front as there are too many uncertainties on the macroeconomic front in China and this was impacting buying across the entire region,” a member of Pellet Manufacturers’ Association of India (PMAI) said.
“Prices were heard to have inched up towards close of the week in China but this did not have any impact on ex-India trading activity, as pellets are still not the preferred raw material choice of blast furnace at a time when finished steel demand and prices are in a state of flux,” he said.