Ex-India pellet prices have rebounded over the past week riding on the revival of buying activity and the higher cost of local merchant prices of fines even though average deal sizes have been on the lower side, SteelOrbis has learned from trade and industry circles.
Indian pellet export prices have gained an average $10/mt to $102-104/mt CFR with sentiments among sellers turning optimistic amid the positive reports from China.
The sources said that a pellet producing arm of an Odisha-based integrated steel plant confirmed a booking for 15,000 mt at a price of $104-108/mt CFR China for high grade with alumina content of less than three percent for end-of-October shipment.
According to market reports, Brahmani River Pellets Limited (BRPL) concluded a trade for 20,000 mt at $104/mt CFR, while an Odisha-based trader reported a trade for 10,000 mt at $102/mt CFR.
“Buyers became more active over the past week and revived trading activity is a big positive and the mood has improved compared to the complete halt in trading over the past several weeks. But the biggest question is whether this will be sustained,” a member of the Pellet Manufacturers’ Association of India (PMAI) said.
“The market is drawing a lot of optimism from reports from China received here. China’s crude steel output in August has been reported at 2.03 million mt, up four percent on month-on-month basis. Iron ore imports including pellets have been reported at 96.21 million mt in August, up five percent month on month. If the crude steel output growth trend is maintained, it would indicate an increase in pellet imports and this expectation is driving ex-India prices,” he said.
However, maintaining a contrarian view, an Odisha-based trader discounted any immediate upturn in buying in the local market, pointing out that stocks at ports in China are still on the higher side even after the increased usage of raw material by mills. And with fresh outbreaks of Covid-19 in some regions of China, buyers would be cautious about building up iron ore stocks in trade channels.