Ex-India pellet prices have recovered some ground in the past week after touching a six-month lower earlier as sellers attempted to hike offers taking their cue from a similar partial recovery in global fines prices, but buyers have still continued to bid very low, leading to an absence of confirmed deals, SteelOrbis learned from trade and industry circles on Friday, April 18.
Sources said that ex-India pellet prices have rebounded by $4/mt to the range of $104-105/mt CFR China, but buyers representing mills in China have continued to bid at least $10-12/mt lower, amid a lack of confidence in finished steel prices, while sellers have preferred local sales offering better margins.
Globally, iron ore fines have staged a slight recovery, absorbing the possible medium-term impact of tariff wars, but this was still not sufficient for mills to shift to higher-priced pellets as feedstock at a time when margins from finished steel remain under pressure.
Even after ex-India prices were nudged up after local sellers took their cue from trends in the market for fines and attempted to pass on rising cost of domestic fines particularly from mines in Odisha, local sales margins have remained higher by around INR 2,100/mt ($24/mt) on ex-plant basis, the sources said.
“Deals are very complicated and not getting finalised as sellers increased offers while buyers are bidding even lower. Buyers lack confidence in finished steel prices. Sellers prefer to wait for a recovery of price overseas, while the focus remains on domestic sales,” a member of the Pellet Manufacturers’ Association of India (PMAI) said.
“We expect price sensitivity for higher grade raw material to persist among mills in China. Portside raw material is being preferred amid the uncertainties of tariffs. Local pellet producers hence continue to divert port stocks to hinterland stockyards for more efficient deliveries to local mills,” he said.