Ex-India pellet prices have staged a slight recovery over the past week, with sellers attempting to nudge up offers riding on the back of improved local demand and prices, but not being successful in driving deals overseas, with Chinese buyers cautious amid weak steel market fundamentals, SteelOrbis learned from trade and industry circles on Friday, June 19.
Sources said that ex-India pellet prices are up by around $3/mt to the range of $114-117/mt CFR China, with the price at the higher end of the range applicable for high grades with silica-alumina content less than three percent.
However, the sources said no deals have been confirmed with buyers showing resistance to higher levels, while sellers have not been pushing deals, instead focusing on local sales amid better demand and higher realizations. This was reflected in a 60,000 mt export tender floated by an eastern India-based producer, but which was withdrawn before the closing date for bids, with the producer preferring to hold back volumes until a more definite recovery is seen.
The sources said that, while the number of inquiries from Chinese buyers is normal, bids have been on the lower side as mills in China are averse to committing to higher-priced raw materials at a time when finished steel prices are still not showing a definitive upside consolidation.
“Focus on local sales is back. Buyers are submitting inquiries but are not accepting higher prices. The monsoon rains are spreading and fines availability will become tight for pellet producers. Hence, higher volumes of pellet inventories are being diverted to local sales. Overseas sales will improve only once prices improve,” a member of the Pellet Manufacturers’ Association of India (PMAI) said.
“Once the benchmark price of iron ore fines recovers, it will support higher pellet prices. Until then, export activity will remain subdued and local sales will be more active,” he added.
