Ex-India pellet prices have edged up over the past week on the back of a few deals even as overall trade activity remained low amid year-end considerations and few active buyers in the market and sellers continuing to focus on local sales offering better margins, SteelOrbis learned from trade and industry circles on Friday, January 2.
Sources said that ex-India pellet prices are up about $2/mt to the range of $120-125/mt CFR China, with the price at higher end of the range applicable to high grades of silica-alumina content less than three percent.
The sources said that an Odisha-based producer concluded a trade for 75,000 mt at a slightly lower price of $118/mt CFR early in the week. However, another offer for a volume of 75,000 mt from another southern India-based seller failed to be converted into a sale as a bid at around $118/mt CFR was rejected by the seller.
Overall market activity has been muted over the past week owing to holidays and a few buyers submitting low bids, as mills in China were attempting to increase the cost effectiveness of their production by shifting to lower grade fines and not relying on high-priced imported pellets.
But sellers have not been inclined to adjust ex-India prices as local sales prices offer better margins of around INR 800/mt ($9/mt) on ex-plant basis even after the latest increase in export offer levels, the sources said.
“Both buyers and sellers are in wait-and-watch mode to assess the new trend that will emerge once business activity picks up. However, we expect trade activity to remain on the lower side owing to the bid-offer disparity. Export volumes will also be kept low as sellers will push higher offers locally where sales and prices are robust,” a member of the Pellet Manufacturers’ Association of India (PMAI) said.
“We hear that only two of the largest pellet producers are submitting offers actively. Ex-India prices are being pushed up largely riding on the bullish local market, but bids will remain lower, providing headwinds to trades,” he added.
