Ex-India pellet prices have increased marginally during the past week, but overall trading activity has taken a hit from bearish sentiments emerging among Chinese buyers, SteelOrbis has learned from trade and industry sources on Friday, February 26.
Market participants have observed that the marginal rise in pellet prices seen during the past week has been largely due to support from the futures market for iron ore prices, and that the fundamentals of the pellet market are pessimistic.
Sources said that ex-Indian pellet prices have edged up a marginal $1-2/mt to $191-196/mt CFR China, but buyers have preferred to be cautious, waiting for a correction to set in as Chinese steel mills may shift towards fines at the end of winter sintering restrictions.
“Most of the limited trades during the past week were for higher grade pellets with low alumina content and at a price at the lower end of the price range. There have been no takers for lower grade pellets with alumina content of three percent and above,” a member of the Pellet Manufacturers’ Association of India (PMAI) said.
“The pellet market is entering a phase of finding a new equilibrium, based on the changing raw material consumption pattern of Chinese steel mills in the near term. Indian pellet prices can be expected to move in a narrow range till then,” he added.
Sources said that an affiliate of Essel Mining has concluded a trade for 30,000 mt of high grade pellet with alumina content of less than two percent at a price of $190-194/mt CFR China.
Godavri Power and Ispat Limited’s pellet producing arm reported a trade of 50,000 mt for April delivery at around $191-195/mt CFR China, the sources said.