Ex-India pellet prices inched up supported by strengthening seen in global prices but divergence of expectations of buyers from China and local sellers kept trade activity silent, SteelOrbis learned from trade and industry circles on Friday, April 24.
Sources said that ex-India pellet prices gained around $2/mt to range of $115-120/mt CFR China with price at highest end of the range applicable for high grades with silica-alumina content less than three per cent.
According to the sources, bids received were significantly lower in range of $110-112/mt CFR indicating that while demand was moderate buyers were not willing to accept higher price level deals.
It was pointed out that price competition and higher supplies from Brazil were offering more viable options to buyers at a time when Indian producers backed by sustained robust domestic demand were unwilling to adjust offers to push sales overseas.
Significantly, pellet local prices were dropped by several large producers. Following this, the gap between local sales and export margins stood reduced to around INR 1,050/mt ($11/mt), compared to INR 1,300/mt ($14/mt) on ex-plant basis, a week ago.
But despite the narrowing gap between local and export margins, large producers were still holding back ex-India volumes. Firstly preferring to wait for workable export price to consolidate above the $125/mt CFR mark before diverting volumes to port stock yards and secondly local prices are expected to rebound and consolidate higher at a faster rate, the sources said.
