Ex-India pellet prices have softened over the past week and, though trade activity is seen to have improved, buyers are unwilling to pay higher prices in view of expected production cuts by some steel mills in China and the lower-than-expected improvement in finished steel margins, SteelOrbis learned from trade and industry circles on Friday, July 7.
Sources said that ex-India pellet prices have moved down to the range of $117-118/mt CFR China, compared to $120-123/mt CFR a week ago.
They said that an Odisha-based pellet producer has reported a trade for 50,000 mt for end-of-July delivery at $118/mt CFR China, while another pellet producing arm of an Odisha-based integrated steel mill has reported two deals for an aggregate of 110,000 mt at the average price of $117/mt CFR.
“Some buying emerged over the past few days, but only at lower prices. Chinese buying is cautious as overall raw material demand is expected to be muted by some mills cutting down outputs and by headwinds to finished steel margins. Ex-India prices may come under more pressure in the coming weeks,” a member of the Pellet Manufacturers’ Association of India (PMAI) said.
“Overall, there will be volatility in the pellet market. Local supplies will remain tight from the logistical challenges of plants during the local rainy season. But this will have a limited impact on prices as buyers in China will prefer port stocks which are currently reported at comfortable levels,” he said.