Ex-India pellet prices have remained stable in the past week, largely owing to the absence of either buyers or sellers in the market even as sentiments deteriorated from reports of cancellations of export tenders and confirmed bookings, SteelOrbis has learned from trade and industry circles.
Ex-India pellet prices have remained at $96-100/mt CFR for lower grade pellet with silica-alumina content of three percent and above and in the range of $105-110/mt CFR for higher grade with silica-alumina content less than two percent.
However, it was pointed out that, in the absence of either sellers or buyers being active in the market, “stable offer levels are largely irrelevant”.
Sources said that one large-volume export tender of around 50,000 mt floated early in the month by a government-run producer was cancelled, while another spot booking confirmed last month by an Odisha-based producer for 30,000 mt was cancelled by the buyer just ahead of the loading date, aggravating the extremely negative sentiments in the market.
While pellet plant operators have been unwilling to issue confirmation, there has been a “lot of chatter” in the industry that they were reducing output as most have withdrawn from overseas sales which currently offer negative margins, and are focusing on local sales albeit for much lower volumes.
“There has not been any fundamental change in the negative market conditions, with steel mills in China under pressure from weak finished steel prices and initiating the options of production cuts, thereby reducing raw material demand,” a member of the Pellet Manufacturers’ Association of India (PMAI) said.
“Total steel output in China in 2023 is expected to be lower than in 2022, and hence we can safely forecast a demand depression for raw materials. The only option for pellet plant operators would be to adjust output and attempt balancing it with local demand,” he said.