Ex-India pellet prices have recorded marginal gains, but no trade has been reported with export activity at a standstill, with this attributed to the long holidays approaching in China and extremely large volumes being booked in the local market offering better margins, SteelOrbis learned from trade and industry circles on Friday, September 22.
Ex-India pellet prices are up by $1/mt from the lower end to the range of $126-130/mt CFR China, but buyers have been unwilling to make new commitments ahead of the extended holiday in China and have no urgency to restock amidst reports of a fall in crude steel output.
But, more importantly, local pellet plants have been focusing on the sudden surge in demand from domestic steel mills at higher prices. The industry sources estimate that an aggregate booking of around 165,000 mt was received by pellets plants in Odisha in the east from steel mills based in Gujarat in the west.
The large-volume sales in the local market have pushed up ex-Odisha pellet prices to INR 9,500/mt ($114/mt), a gain of INR 800/mt ($10/mt) over the past week, the sources said.
“Global prices are stable. But recent price increases have been at a faster pace than finished steel and hence there is some caution in restocking ahead of the holidays in China. Thereafter, a price correction cannot be ruled out,” a member of the Pellet Manufacturers’ Association of India (PMAI) said.
“Sellers are more reliant on local sales. A few plants in Odisha have reported that they do not have sufficient inventories for immediate deliveries following very large volumes booked over the past week. We assess that, unless there is a strong rebound post-holiday in China, local sales will dominate the pellet market,” he said.