Ex-India pellet prices have lost ground amid low demand as mills in China have been avoiding restocking with higher-priced raw materials and have been moving towards cheaper fines to protect margins which have been under strain, SteelOrbis learned from trade and industry circles on Friday, April 7.
Ex-India pellet prices are in the range of $120-125/mt CFR China, down from $125-130/mt CFR a week ago, with buyers not confirming deals for pellets and instead moving to lower grade fines, prices of which have been falling faster.
However, a large-volume trade was reported by an Odisha-based pellet plant for 55,000 mt at $133-134/CFR, but at least one source in trade circles said that it was too high.
A pellet producing arm of an Odisha-based integrated steel mill reported a trade for 30,000 mt at $122/mt CFR, sources said.
“Steel production in China is good but finished steel prices and margins of producers are under strain. Hence, mills are extremely cautious over using higher-priced feedstock. Restocking will emerge for fines, but we are not sure it will for pellets. Indian sellers are unlikely to adopt aggressive pricing to push sales overseas and domestic sales realizations continue to remain higher compared to exports,” a member of the Pellet Manufacturers’ Association of India (PMAI) said.
“In our assessment, pellet stocks at ports in China are around 7 million mt, sufficient for the current low demand scenario. Hence, only stray deals can be expected in the local market over the next week,” he said.