Ex-India pellet prices have remained stable over the past amid the emergence of a stray deal, while a bearish mood has persisted among sellers due to reports of unsold volumes, SteelOrbis learned from trade and industry circles on Friday, April 17.
Sources said that ex-India pellet prices have been maintained at $113-118/mt CFR China with the price at higher end of the range applicable for high grades with silica-alumina content of less than three percent.
The sources said that a trade for 75,000 mt was confirmed at a price of $115-117/mt CFR China but, despite the deal breaking the prolonged silent market conditions, the mood in the market has remained bearish.
The cue for such a mood comes from a large-volume tender offer failing to attract any bids and remaining unsold during the past week, indicating that pricing is a major negative against concluding deals, and that buyers have been unwilling to participate in competitive bidding.
The sources said that price-sensitive buyers in China have preferred participation in the spot market where negotiations for discounts are still possible even though there have been no indications of sellers being willing to accept discounted sales.
It was pointed out that the combination of high port inventories in China coupled with volatile freight rates have been keeping buyers cautious as regards making fresh import commitments. On the other hand, sellers have been holding back offers, finding current bid levels unattractive against the backdrop of robust local demand and prices.
Furthermore, some declines in prices have been seen in the domestic pellet market, leading to a slight narrowing of the gap between local sales and export margins to around INR 1,300/mt ($14/mt), from INR 1,400/mt ($15/mt), on ex-plant basis. But domestic prices have still been more attractive, with not more than two or three pellet producers active in participating in exports, the sources said.
“There is a wide divergence of expectations between sellers and buyers. The demand-supply dynamics are changing in China, with the number of suppliers poised to increase shortly. This will result in adjustments in import pricings. Hence, both buyers and sellers are cautious and prefer to wait for a new trend,” a member of the Pellet Manufacturers’ Association of India (PMAI) said.
