Indian pellet export prices have continued to follow a downward trend as steel prices in China have dropped, reducing the appetite of Chinese mills to restock higher-priced raw materials like concentrates and pellets, also taking into account lower medium-term demand in the wake of production cuts in China, SteelOrbis learned from trade and industry circles on Friday, November 5.
Ex-India pellet prices have declined by $5-7/mt to $145-153/mt CFR China and higher grades with alumina content less than two percent are attracting a premium and priced at $155-165/mt CFR.
“Margins of steel mills in China are falling. This squeezes their option to increase the use of higher-priced raw materials like pellets and concentrates. Even the traditional demand spike for pellets seen every year during winter sintering restrictions is proving elusive this year as mills are not keen on maintaining higher blast furnace output levels,” a member of the Pellet Manufacturers’ Association of India (PMAI) said.
“On the supply side, the downtrend in prices is coming since last week the Indian currency strengthened against the US dollar moving up from INR 75.20 to INR 74.40 to the dollar, thereby reducing the benefits of the exchange rate. Most local pellet producers are reluctant to conclude trade below the $150/mt CFR mark, resulting in the muted trading seen last week,” he added.
Sources said that Godvari Ispat and Power Limited (GIPL) has reported a trade for about 30,000 mt at around $150-155/mt CFR.
An Odisha-based plant is heard to have concluded a trade for 25,000 mt for January delivery at a price of around $153/mt CFR, the sources said.