Ex-India pellet trade has remained almost inactive in the absence of buyers from China and with prices slipping, with sellers expecting a prolonged lull in market conditions, SteelOrbis learned from trade and industry circles on Friday, January 27.
Ex-India pellet prices have fallen to the range of $118-125/mt CFR China, compared to quotes in the range of $127-135/mt CFR a week ago. The only deal over the past week was reported by an Odisha-based producer for 30,000 mt for March shipment to a Singapore-based buyer at $118/mt CFR, reportedly for onward sale in Asia.
According to the sources, the market is expecting the inactivity to be prolonged as buyers from China would be slow in returning to restock even after the end of the New Year holiday at the end of this month, having sufficiently booked earlier and with an estimated 300,000 mt in the process of being loaded currently at Indian ports and scheduled for landing next month.
It was pointed out that pellet plants are largely operating at optimal capacities and hence continued inventory build-up pressures are being reflected in local pellet prices, which edged have down by INR 300/mt ($4/mt) to around INR 7,800/mt ($96/mt) ex-works in Odisha.
“There will be inventory pressures in the short term. A lot of volumes are waiting for loading at Indian ports. Buyers will also take time in returning to the local market with the inactive conditions to extend until mid-February. This will continue to put pressure on prices,” a member of the Pellet Manufacturers’ Association of India (PMAI) said.
“Our assessment is that estimated port stocks in China are around 6 million mt and are slated to rise with the arrival of Indian vessels. Hence, buyers will be not in a rush to commit fresh bookings. A short-term correction cannot be ruled out next month either,” he said.