The extended bullish run in the ex-India pellet trade has hit a wall and prices are falling amid weakening futures prices in China and lower bids submitted by buyers, SteelOrbis learned from trade and industry circles on Friday, January 12.
Ex-India pellet prices have lost around $7/mt to the range of $137-140/mt CFR China but, with bids received down further by around $10/mt, no deals have been concluded by sellers.
“Indian pellet export prices fell sharply over the past week as Chinese buyers have already completed restocking through aggressive deals over the past few weeks and have sufficient stocks for the Lunar New Year holiday. Buyers are now not accepting higher-priced pellets following the nervousness over the drastic falls seen in the futures market,” a member of the Pellet Manufacturers’ Association of India (PMAI) said.
“Prices are expected to fall further as buyers want a cheaper price, while sellers are reluctant to adjust as they are seeing strong domestic demand. According to reports received here, port stocks in China increased by 0.4 million at the start of the past week estimated at 4.7 million mt and hence the slowdown in restocking,” he said.
An official at an Odisha-based pellet plant said that on ex-plant basis pellet prices worked out at $102-105/mt, while domestic prices on ex-plant basis are at around $108/mt, thereby lowering the incentive to push higher volumes to overseas sales.