Ex-India pellet prices have remained stable but trade activity has remained silent amid the persisting bid-offer disparity and the divergent outlook based on differing assessments of the impact of production cuts by mills in China on raw material demand, SteelOrbis learned from trade and industry circles on Friday, March 28.
Sources said that ex-India pellet prices have remained unchanged in the range of $108-109/mt CFR but with bids reported at $98-100/mt CFR no transactions have been confirmed during the past week.
According to the sources, a few deals were heard to be under buyer-seller negotiations but they were not finalised.
Interest in exports has been minimal among local producers as local sales realisations have continued to be about INR 1,900/mt ($22/mt) higher than those from sales overseas on ex-plant basis, the sources said.
“The market will remain range-bound during the fiscal year-end. Thereafter, the outlook is cloudy,” a member of the Pellet Manufacturers’ Association of India (PMAI) said.
“A section of market participants believes that production cuts by mills in China will lead to a depression in the raw material outlook, while others think that production cuts can lead to improved margins and offer blast furnace operators greater flexibility to shift to higher grade raw materials and low-alumina-content pellets. How these dynamics play out will determine the short-term price trend,” he said.
However, according to an official at a pellet producing arm of an Odisha-based integrated steel mill, “Domestic sales will continue to be the focus. We do not see ex-India prices bridging the current wide gap between the export-domestic sales realisation differentials. This is evident from the fact that the east coast pellet producers are maintaining minimal volumes at port stockyards”.