Ex-India pellet prices have showed tentative signs of a recovery, reacting to the improvement in sentiments and outlook over finished steel demand and prices in China, but buying has still remained muted with mills preferring to maintain low levels of raw material inventories, SteelOrbis learned from trade and industry circles on Friday, March 31.
Ex-India pellet prices are up by $5-8/mt to $125-130/mt CFR China, but few inquiries have been converted to confirmed deals. Sources said that a section of buyers in the market maintains that the improved outlook for finished steel prices in China is based on production cuts by mills and will thus have a minimal impact on increasing imported raw material demand.
Sources said that a large-volume deal for 75,000 mt was confirmed by an Odisha-based pellet producer, but no confirmation was made regarding the price, though market circles speculated that the deal was closed at $130/mt CFR.
“Ex-India prices are showing signs of recovery. But deals are not maturing yet. For one, buyers are unsure whether the recovery in finished steel prices in China will lead to increased raw material demand. From the sellers’ point of view, net export realizations are still low at around INR 9,020/mt ($110/mt) for deliveries from plants in Barbil, Odisha, compared to net domestic realizations of INR 9,600/mt ($117/mt). Only producers with large inventories are hence willing to conclude overseas sales,” a member of the Pellet Manufacturers’ Association of India (PMAI) said.
“But the mood is definitely improving and a short-term target price of $140-145/mt CFR will trigger a revival in real trade activity,” he said.