Indian pellet exports have staged a strong rebound with both prices and volumes surging amid aggressive post-holiday buying from China and with weak local sales prompting sellers to push higher volumes overseas, SteelOrbis learned from trade and industry circles on Friday, October 20.
Sources said that aggressive buying of large tonnages pushed ex-India pellet prices to a six-month peak in the range of $129-131/mt CFR, up from $114-117/mt CFR a week ago.
The aggregate trade volume over the past week has been around 350,000 mt.
Market sources said that domestic pellet demand has remained soft in reaction to low demand for sponge iron and the overall slowdown in finished steel movement during the ongoing festival season.
A southern India-based pellet producer has concluded a deal for 50,000 mt at around $130/mt CFR and one of the sellers is also reported to be in negotiation for another tonnage of 40,000 mt. An Odisha-based pellet-producing arm of an integrated steel mill has reported a trade for 30,000 mt at $129/mt CFR.
“Buyers from China have become very aggressive after the holidays with port inventories heard to be down by around 0.3 million mt. Finished steel margins are still under strain in China, but mills are increasing plant utilization rates, prompting fresh restocking of raw materials,” a member of the Pellet Manufacturers’ Association of India (PMAI) said.
“Local pellet prices have fallen by around INR 500/mt ($6/mt) over the past week. Against this backdrop, the rise in export prices has come as a big opportunity for producers to conclude large-volume sales overseas,” he said.
However, at least two traders have expressed caution as regards the sustainability of the current uptrend on the grounds that large volumes of raw materials are expected at ports in China and, with some mills scheduled to go into maintenance shutdowns, the demand for pellets could taper off in the coming weeks.