After a brief pause, ex-India pellet prices have resumed their upward movement on the back of restocking from China fueled by reports of rising crude steel output and the tightening of raw material supply, SteelOrbis learned from trade and industry circles on Friday, December 8.
Ex-India pellet prices are up by an average of $2/mt to $138-140/mt CFR China on the back of surging volumes, which would have been even higher but for some sellers holding back offers, waiting for prices to consolidate near $145/mt CFR in the coming week.
Two Odisha-based pellet producers acting as a consortium concluded a combined deal for 165,000 mt at $140/mt CFR China, sources said.
A southern India-based government-run pellet producer concluded a tender-based sale of 50,000 mt with the highest bid received from a Hong Kong-based trader at $131/mt FOB, the sources said.
A pellet producing arm of an Odisha-based integrated mill reported a trade for 50,000 mt at $138/mt CFR China, against a realization of $130/mt CFR for a smaller tonnage sold a week earlier.
“There is a sharp rise in enquiries and bids even at current high prices. But there are some port-based pellet plant operators with ready exportable volumes that are on wait and watch expecting to sell at even higher prices. The target is $145/mt CFR,” a member of the Pellet Manufacturers’ Association of India (PMAI) said.
“The rising crude steel output seen from blast furnace operators has been triggering strong interest among raw material traders in restocking. The futures market is also very robust,” he said.
However, one Odisha-based pellet plant operator expressed caution over the sustainability of the current bullish market conditions. He said there are risks to raw material prices from the expected drop in blast furnace output during the winter months.