Ex-India pellet prices have entered a downward trend over the past week, with prices edging lower seen as the first signs of a correction setting in from buyers’ resistance to the recent rapid gains, with fewer deals reported in the market, SteelOrbis learned from trade and industry circles on Friday, October 24.
Sources said that ex-India pellet prices have lost about $2/mt to the range of $119-126/mt CFR China, with the price at the higher end of the range applicable for high grades with silica-alumina content less than three percent.
There were sharp falls in the number of deals reported in the market with one trade for 50,000 mt confirmed by an Odisha-based seller at $120-122/mt CFR, the sources said.
Buyers representing mills in China turned cautious and were seen to be deferring any new bookings after the recent surge in prices and the uncertain pricing trend in finished steel.
According to sellers, local sales price of pellets also softened, by around INR 300/mt ($3/mt) on ex-plant basis, but still offered better margins over exports and hence the signs of a correction in export prices are “not an immediate concern” as most producers could still hold back volumes held at ports for overseas sales.
“Pellet prices have moved up too fast too soon. At the same time, the weakness in finished steel prices is not supporting such rapid gains in raw material prices, forcing buyers to turn very cautious,” a member of the Pellet Manufacturers’ Association of India (PMAI) said.
“The correction in ex-India prices, along with the softening of local sales prices is not a concern yet. But going forward, if the twin pressures gain momentum and both local and export markets enter a downtrend, it can emerge as a new challenge for producers. Now it is wait and watch for a new definitive trend to surface,” he added.