Ex-India pellet prices have remained unchanged over the past week but inquiries have failed to be converted into deals as buyers have been unwilling to accept higher prices, while sellers have continued to focus on the domestic market which has been offering better margins, SteelOrbis learned from trade and industry circles on Friday, August 22.
Sources said that ex-India pellet prices are stable at $107-111/mt CFR China with the price at the higher end of the range effective for high grade pellet with silica-alumina content less than three percent, but trade conditions have remained silent.
According to the sources, with production costs rising factoring in the higher price of fines and the cost of transportation and logistics during the rainy season, sellers have been unwilling to adjust ex-India prices to push sales overseas.
At the same time, local sales have continued to fetch margins about INR 1,700/mt ($19/mt) higher on ex-plant basis, further reducing any incentive to push overseas sales and with large volumes in port stocks already being diverted to inland stockyards for domestic supplies, the sources said.
“It makes little sense in selling overseas as there is little scope for improving margins there. Buyers are not willing to spend on high-priced raw materials unless finished steel prices consolidate at higher levels. Also, the current export price is not aligned at all with production costs of local pellet producers,” a member of the Pellet Manufacturers’ Association of India (PMAI) said.
“Exports are in a stalemate situation. Sellers are not willing to adjust prices when costs are on the rise. Buyers are quoting very low bids, lacking confidence,” he added.