Ex-India pellet prices staged a recovery over the past week, riding on the back of only a few high-volume deals and hence doubts have persisted over its sustainability owing to weak demand during the winter months and strained finished steel margins in China, SteelOrbis learned from trade and industry circles on Friday, December 19.
Sources said that ex-India pellet prices have gained around $3/mt to the range of $117-122/mt CFR China with the price at the higher end applicable to high grades with silica-alumina content less than three percent.
However, the sources pointed out that the gains seen have been largely owing to the boost to sentiments from just two large deals concluded during the week at higher prices, while the number of active buyers has been on the low side because mills in China have reduced imported raw material restocking during the winter months.
Among the two large deals was a 75,000 mt supply contract concluded by an Odisha-based pellet producer at $117-119/mt CFR, while a second trade for 65,000 mt was confirmed by another eastern India-based pellet plant at $119/mt CFR, sources said.
“There are very few buyers in the market. The few high-volume deals are not a general indication of market conditions which remain very slow. Buyers are not accepting ex-India prices as they are not in a hurry to restock,” a member of the Pellet Manufacturers’ Association of India (PMAI) said.
“The differential between local and export prices has narrowed to about INR 800/mt ($9/mt), but sellers continue to serve strong local demand and have minimal port stocks for overseas sales. This trend can continue during the winter months while sellers await a new trend to emerge in the New Year,” he added.
