Ex-India pellet prices have remained largely stable over the past week, but low bids have resulted in no deals being done, with buyers from China remaining on the sidelines owing to sufficient stocks and mills attempting to use lower-priced feedstock to improve cost efficiencies, SteelOrbis learned from trade and industry circles on Friday, January 16.
Sources said that ex-India pellet prices have remained unchanged overall in the range of $120-125/mt CFR China, showing marginal movements of $1/mt in either direction, but no bids were reported in the market.
At the same time, producers have continued to focus on local sales with some Raipur-based pellet plants in the central region increasing domestic prices by INR 200/mt ($2/mt) on the back of strong demand and the tightening of supplies.
The mood in the domestic market has been boosted by reports that aggregate December pellet sales in the local market were up a healthy 20-25 percent on year-on-year basis as more mills were using higher grade feedstock (pellets) boosted by the bullish trend in the local finished steel market and improved margins per metric ton, the sources said.
At least two officials at producing companies said that a few stray bids were reported at $119-120/mt CFR, while sellers have been seeking at least $5-6/mt higher for any workable price, resulting in stalemate conditions in the export market.
“We expect exports to remain at very low levels as we hear ports stocks in China to be comfortably able to meet short-term low demand. Any revival in trade activity will have to wait till business activity resumes after the holiday season in China next month,” a member of the Pellet Manufacturers’ Association of India (PMAI) said.
“Of course, ex-India prices will need to consolidate to levels acceptable to buyers. But this will depend on finished steel prices in China also consolidating, offering sufficient margins for mills to be able to shift to higher-priced feedstock,” he added.
