Indian iron ore pellet exporters have continued to push up prices aggressively and have found support from rising prices of high grade fines in China, coupled with the tightening of supplies, SteelOrbis has learned from trade and industry circles.
Sources said that, amid continuing high prices of fines available from local merchant miners in India, pellet producers have pushed up prices by $20/mt, for the second consecutive week to levels of $260-280/mt CFR China, with at least two pellet plant operators claiming that a price target of $300/mt in the short term is a distinct possibility as the availability of fines is unlikely to ease in the medium term.
The sources said that, despite the rise in ex-India pellet prices, trading activity has remained robust with Chinese buyers active in concluding deals as prices of high grade ex-Brazil fines are heard to be rising, and also given the slight fall in Chinese port stocks and improved sentiments as regards finished steel prices.
“High frequency data indicates pellet prices might show intermittent dips. But the longer-term price trend will continue to show a rise despite possibilities of lower liquid steel output from mills in China,” a member of the Pellet Manufacturers’ Association of India (PMAI) said. “In order to maintain margins for value addition in production of pellets amid rising local price of fines, a $300/mt price is imperative for pellet plants to maintain viability,” he added.
Sources said a pellet producing arm of Essel Mining is heard to have concluded a deal for 45,000 mt of high grade pellets with alumina content of less than three percent at a price of around $280-290/mt CFR.
It also reported a trade of around 30,000 mt with a Singapore-based trading firm at $260-270/mt CFR, the sources added.
The pellet plant of Jindal Steel and Power Limited is heard to have finalized a September delivery contract for 30,000 mt at around $270/mt CFR, the sources added.