Ex-India pellet prices have showed volatility and buyers have been remaining on the sidelines as post-holiday business activity resumes in China, awaiting a more definitive market direction to emerge, SteelOrbis learned from trade and industry circles on Friday, October 13.
Sources said that ex-India pellet prices fell to levels of $114-117/mt CFR China, but have recovered slightly towards the close of the week to $118-122/mt CFR, but still $2/mt lower on week-on-week basis.
The sources said that, despite prices weakening, the bid-offer disparity resulted in no trade reported. Buyers are waiting for the post-holiday restocking by mills in China to gain momentum, while buyers are seeing a softening of raw material demand in tandem with the crisis in the construction sector, and the fall in finished steel demand would trigger further declines in pellet prices.
“There are several conflicting dynamics in pellet exports. There is a lot of chatter about production cuts by mills in China next quarter. At the same time, port stocks are on a decline,” a member of the Pellet Manufacturers’ Association of India (PMAI) said.
“At the same time, domestic pellet producers have dropped local prices by around INR 300/mt ($4/mt) on ex-works basis. If local prices slide further, producers would need to adjust their production more aggressively and this will adjust the bid-offer disparity seen currently and which will put off buyers,” he added.