Ex-India pellet prices have surged reacting to a sustained rise in local price of fines amid a slight revival in overseas sales although buyers are exercising caution, SteelOrbis learned from trade and industry circles on Friday, July 25.
Sources said that ex-India pellet prices have gained $6-8/mt to the range of $109-114/mt CFR China and higher grade (silica-alumina content less than 3 percent) was quoted at $117/mt CFR, up from levels of $107/mt CFR a week ago.
According to the sources, local prices of fines are up by INR 200-400/mt ($2-4/mt) on the shortfall of the arrival of volumes from pithead to stockyards owing to logistical challenges during the monsoon rainy season. In reaction, pellet producers were also passing on the higher costs through sharp hikes in ex-India offers.
However, even though more buyers representing mills in China were active in the market, they were cautious in accepting higher prices and hence the number of confirmed deals was limited.
A tender-based sale of 50,000 was confirmed by an Odisha-based seller which received the highest bid of $107/mt CFR, on the lower side, with the market attributing it to signals of resistance despite the uptrend seen over the past week, the sources said.
Another Odisha-based seller has reported a spot sale of 40,000 mt at $109/mt CFR, the sources added.
“Local supplies are tightening, and prices of fines are hardening during the monsoon rainy season. Domestic demand also remains robust supporting pellet producers to nudge up prices, both in the domestic market and overseas,” a member of the Pellet Manufacturers’ Association of India (PMAI) said.
“Macro-economic sentiments in China are improving and this is reflected in the higher number of enquiries received in the market. However, there has not been a commensurate rise in the number of deals, indicating that mills in China are still very cost-conscious and cautious in committing raw material restocking at the higher levels,” he added.