Ex-India pellet prices edged up largely driven by rising freight charges amid weak demand in China and silent trade conditions, SteelOrbis learned from trade and industry circles on Friday, March 20.
Sources said that ex-India pellet price was up by about $1/mt to range of $114-119/mt CFR China with price at the higher end of the range applicable for high grades with silica-alumina content less than three per cent.
According to the sources, export realizations based on FOB price was actually falling as higher CFR prices was reflection of rising freight rates. For example, the sources said that current FOB prices would not exceed $98-101/mt.
As a result of this, robust domestic sales volumes and prices continued to be the preferred option for pellet producers with local sales margins exceeding exports realizations by around INR 1,200/mt ($13/mt) on ex-plant basis.
“No deals are working out as demand in China is weak. More importantly, higher freight costs are getting reflected in ex-India CFR based pricing. These prices are only ‘paper quotations’. It does not reflect unattractive margins available to a seller under current market conditions,” a member of Pellet Manufacturers’ Association of India (PMAI) said.
“Therefore pellet export prices is expected to remain firm based on CFR pricing but will also remain unattractive from point of sellers, and buyers will be cautious in bearing higher freight cost and resulting landed price at destination,” he added.
