Ex-India pellet prices have showed small gains over the past week, but no trade has been reported owing to the bid-offer disparity, indicating resistance from buyers representing mills in China, SteelOrbis learned from trade and industry circles on Friday, November 28.
Sources said that ex-India pellet prices are up $1/mt to the range of $115-120/mt CFR China with the price at the higher end of the range applicable to high grades with silica-alumina content of three percent or less.
According to the sources, bids have been heard in the range of $108-110/mt CFR but sellers have not been willing to accept a lower price at a time when local sales continued to offer better realizations.
It was pointed out that domestic realizations are around INR 1,200/mt ($14/mt) higher than export sales on ex-plant basis, prompting sellers not to accept low bids.
“On the demand side, we hear mills in China are less interested in pellets at a time when finished steel prices are facing strong headwinds and prefer lower grade fines. Hence, bids are low. On the supply side, domestic demand remains robust and prices are better too. Most producers are maintaining low port stocks and diverting most of their output to local mills,” a member of the Pellet Manufacturers’ Association of India (PMAI) said.
“We expect exports to remain dull in the medium term unless there is a strong uptick in workable prices,” he added.
