Ex-India pellet prices have showed volatility before settling at lower levels and, though this increased the overall number of bids received, sellers were not interested in conversion to deals as prices were still lower than domestic sales realizations, SteelOrbis learned from trade and industry circles on Friday, May 26.
Early in the week, ex-India pellet prices rose to levels of $120-123/mt CFR but soon slumped to $106-110/mt CFR, compared to $111-115/mt CFR a week ago, for lower grade pellets with combined silica-alumina content of more than three percent.
According to the sources, about eight bids were received by buyers in the past week but none were converted into supply contracts as they were too low and below realizations from domestic sales.
The fall in ex-India prices and the hardening of local sales prices after large bookings by mills have further widened the gap between realizations from exports and local sales.
“Ex-India pellet prices showed tentative signs of improvement but this has not been sustained. Buyers became more active in terms of submitting bids but these were still too low to convince sellers to conclude deals. The local market is more attractive,” a member of the Pellet Manufacturers’ Association of India (PMAI) said.
“Steel mills in China are expected to increase capacity utilizations levels in the coming weeks. But we do not see this supporting a rise in raw material demand. Mills are expected to continue to prefer portside stocks over committing new import trades,” he said.