Ex-India pellet trading activity has gained momentum during the past week, with prices rising amid stronger buying interest and tightening supplies, as sellers hold limited ready stocks at port stockyards during the current monsoon season, SteelOrbis learned from trade and industry sources on Friday, July 17.
According to sources, ex-India pellet prices have increased by around $2/mt to $117-119/mt CFR China, with the upper end of the range applicable to higher grades with silica and alumina content below three percent. A few deals for these grades have reportedly been concluded at even higher premiums.
An Odisha-based producer concluded a sale of 60,000 mt of high-grade pellets with silica and alumina content below two percent at $120/mt CFR, including the premium.
Another eastern India-based producer sold 40,000 mt of regular-grade pellets at $117-118/mt CFR, while a separate deal for 50,000 mt was concluded at $118/mt CFR, the sources said.
Although domestic and export sales margins are currently almost on a par, sellers are quoting higher prices for prompt deliveries, as stocks at port stockyards remain low. Meanwhile, the replenishment of port inventories from production plants has faced logistical challenges due to widespread rainfall, particularly in the major pellet-producing regions in eastern India.
An official at the pellet-producing arm of an integrated steel mill said that a number of Chinese steelmakers are optimizing costs by blending regular-grade pellets with low-silica and low-alumina pellets of Indian origin. In addition, the current premium for iron ore lumps has supported demand for imports of higher-grade ex-India pellets.
