Ex-India pellet prices have lost ground, taking their cue from falling iron ore fines prices combined with sellers’ reluctance to sell overseas at a time when local sales are fetching higher prices, resulting in no confirmed trades being reported in the market over the past week, SteelOrbis learned from trade and industry circles on Friday, November 15.
Sources said that ex-India pellet prices have decreased by $3/mt to the range of $109-111/mt CFR China, while domestic sales prices are up by around $2/mt in Odisha.
The sources said that reports received in India indicate that mills in China are seeking supplies of medium grade fines with high alumina content to reduce raw material costs at a time when finished steel margins remain under pressure due to the disappointment caused by the Chinese government’s economic stimulus measures.
At the same time, domestic sales prices are about $25/mt higher on ex-plant basis compared to export margins amid the strong demand for large volumes from local mills and hence pellet producers have been focusing more on the domestic market and have been holding back export offers until improvements are seen.
“Current export prices do not work for us. We, like most other producers, are holding back export offers because local sales are strong and offering better margins. In fact, a number of producers are diverting export allocations at port stockyards for domestic sales,” a member of the Pellet Manufacturers’ Association of India (PMAI) said.