Ex-India pellet prices showed a sharp rise on back of concerns over iron ore supplies in China, but trade still failed to work out with sellers seeking even higher prices supported by more profitable sales in the domestic market, SteelOrbis learned from trade and industry circles on Friday, September 12.
Sources said that ex-India pellet prices surged $6/mt to range of $113-121/mt CFR China with price at the higher end of the range effective for high grade pellets with silica-alumina content less than 3 percent, touching a six-month peak.
The sharp rise was attributed to serious concerns over supplies in China triggering high volatility in futures and seaborne prices which got reflected in ex-India prices. However, no trades were reported as Indian pellet producers continued to increase workable prices to the levels of $125-130/mt CFR supported by robust demand from domestic mills and rising cost of iron ore fines.
It was pointed out that most producers had diverted port stocks to stockyards in hinterland for more efficient supplies to local mills. The sources said that domestic sales realizations were around $100-110/mt depending on grade on ex-plant basis.
“At current levels, domestic sales are more profitable. There is fresh global support but it is not good enough for local sellers to push exports over local sales. Buyers in China will need to reconcile to further consolidation in import prices as global supplies tighten in order to prompt Indian sellers to work out overseas supply contracts,” a member of Pellet Manufacturers’ Association of India (PMAI) said.
“Going forward, there will be some more support to raw material prices on restocking following concerns over supplies in China. This will offer opportunities to Indian pellet producers but the latter will be very selective against backdrop of strong domestic market,” he added.