Ex-India pellet prices have continued to consolidate at higher levels over the past week, with buyers from China becoming active in the market driving large-volume deals, but not all sellers are rushing into exports as local sales continue to fetch better margins, SteelOrbis learned from trade and industry circles on Friday, September 19.
Sources said that ex-India pellet prices have gained $2/mt to the range of $115-123/mt CFR China with the price at the higher end of the range applicable for high grade ore with silica-alumina content less than three percent.
The sources said that an eastern India-based pellet producer reported a large deal for 75,000 mt at $121/mt CFR, while another seller concluded a sale of 50,000 mt at $118/mt CFR.
A southern India-based seller has closed a tender-based sale with the highest bid received reported at $120/mt CFR, the sources said.
However, only a few sellers were driving the export market while most others were not submitting offers very aggressively. Firstly, because the current price level is still below most sellers’ target price range of $125-130/mt CFR and, secondly, pellet producers at present have negligible exportable volumes at port stockyards, having diverted most of their volumes into the hinterland for attractive domestic sales.
“There is definitely much more activity from buyers representing mills in China. Strong demand is emerging in China and is expected to keep prices elevated. But they are still below the $125-130/mt expectations of most sellers. Furthermore, local sales prices are still around INR 1,100/mt ($12/mt) better than export realizations. Riding on robust domestic demand, pellet producers led by Jindal SAW Limited have increased domestic sales prices by INR 300/mt ($3/mt) over the past one week,” a member of the Pellet Manufacturers’ Association of India (PMAI) said. “If the ex-India pellet price consolidation continues for one or two more weeks, pellet producers can be expected to put up large volumes for export, leading to improvements in the number of deals seen in the market,” he added.