Ex-India pellet prices have softened over the past week, with buyers becoming cautious and local prices hardening, widening the gap between export and domestic sales realizations, prompting sellers to hold back export offers, SteelOrbis learned from trade and industry circles on Friday, April 10.
Sources said that ex-India pellet prices have lost around $2/mt week on week to the range of $113-118/mt CFR China, with the price at the higher end of the range applicable to high grades with silica-alumina content less than three percent.
According to the sources, while demand for raw materials in China is reported to be stable, buyers still price-sensitive and cautious in committing to trades for high-priced pellets and have preferred fines as a more viable alternative.
At the same time, several large Indian pellet producers have hiked local sales price by INR 200-300/mt ($2-3/mt), taking their cue from the significant increase in prices announced by the largest domestic iron ore producer NMDC Limited and riding on robust local demand.
This has increased the difference between domestic and export price realizations to around INR 1,700/mt ($18/mt), from INR 1,475/mt ($16/mt), on ex-plant basis, a week ago.
The sources said that most pellet producers have been maintaining volumes at port stockyards at lower levels and have preferred to move volumes to the hinterland for more efficient supplies to domestic mills.
“The current export price is not attractive for sellers and they are not maintaining much volume for overseas sales. Also, higher freight rates are putting pressure on FOB prices, lowering margins for exporters,” a member of the Pellet Manufacturers’ Association of India (PMAI) said.
“There is some optimism that export trade activity may improve later in the month on expectations of freight rates softening and an easing of geopolitical tensions in the Middle East,” he added.