The downturn in ex-India pellet prices has gained momentum over the past week with enquiries drying up and trade falling silent amid the weakening seen in iron ore fines prices and buyers’ resistance to recent increases in offer levels, SteelOrbis learned from trade and industry circles on Friday, November 14.
Sources said that ex-India pellet prices are down by around $7/mt to the range of $111-115/mt CFR China with the price at higher end of the range applicable for high grades with silica-alumina content less than three percent.
However, despite the fall in offer prices, enquiries from buyers have been scarce over the past week, with only one unconfirmed deal heard in the market.
According to the sources, there was talk of a deal for 75,000 mt sold by a major Odisha-based producer at a price in the range of $114-116/mt CFR, but it was not confirmed, with a section of the market claiming the price to be “too high”.
It has been pointed out that, following the slump in ex-India prices, local sales are fetching a higher margin of around INR 1,400/mt ($16/mt) on ex-plant basis and large producers have exited overseas sales, diverting almost their entire output to the domestic market.
“We hear that mills in China have stocked up sufficiently for the usual lean winter months of December and January, leading to a fall in interest in imported raw materials. Also, there are uncertainties regarding how the current downturn will pan out and hence buyers are deferring immediate supply contracts,” a member of the Pellet Manufacturers’ Association of India (PMAI) said.
“As for sellers, only a few port-based plants with volumes at port stockyards are submitting offers. Most large producers are focusing on local sales. This is expected to continue until such time as there is some clarity on export market trends, expected over the next few weeks,” he said.