Ex-India pellet prices strengthened on positives emerging from China and even though no deals were reported over the past week, sellers are optimistic of improved trading activity next week, SteelOrbis learned from trade and industry circles on Friday, August 25.
Ex-India pellet prices are up by around $10/mt to the range of $114-117/mt CFR China on reports that production cuts by mills in the country will not be as drastic as expected earlier.
Sources said that the slight uptrend emerging in the Chinese market improved the mood among local sellers even though buyers refrained from fresh commitments preferring to wait and assess scheduled arrivals of consignments at ports where existing stocks are reported at around 6 million mt.
According to an official with an Odisha based pellet producer, despite the gains in ex-India price, it is still lower than realizations from local sales.
He said that on ex-plant basis, local pellet price increased to INR 8,000/mt ($96.38/mt) while export realization on ex-plant basis was still lower at around INR 7,500/mt ($85/mt) prompting sellers to continue to hold back offers and wait recent gains in price in China to consolidate at higher level.
“Despite inactive market conditions, for sellers there is something to look forward to, situation in China is improving and not as bearish as a week ago. Mills in China can be expected to cut output but not in a big way. Raw material demand and price will improve but slowly,” a member of Pellet Manufacturers’ Association of India (PMAI) said.
“Buyers are keeping a close watch on the supply side. We expect some cautious buying to emerge next week,” he said.