The brief revival in Indian pellet export market seen earlier has fizzled out with prices resuming a downtrend and even lower levels have failed to attract buying during the past week, SteelOrbis learned from trade and industry circles on Friday, September 3.
Gains in prices seen late last month have been wiped out, with ex-India pellet prices falling back to $185-190/mt CFR China compared to $190-205/mt CFR a week ago, with local producers claiming that Chinese steel mills are reworking on their raw material inventory management to ensure carrying much lower stocks as lower steel production targets would entail a much lower dependency on imported raw materials.
“The outlook for Indian iron ore, both in terms of volumes and prices, is negative. There is a fundamental long-term change ongoing in the Chinese steel industry. Steel prices are recovering but, unlike earlier, this is not going to impact the raw material market. Because with Chinese steel production being reined in, mills are reworking raw material stock management at a much lower level, month on month,” a member of the Pellet Manufacturers’ Association of India (PMAI) said.
“According to our assessment, total Chinese imports of iron ore, including pellets, in March 2021, were around 102.5 million mt. Since then, each month, total imports have not exceeded 100 million mt. With ex-China finished steel shipments expected to continue to fall, raw material imports will continue to move down in tandem. Indian pellet exporters have little upside for China and will need to build up alternative markets in the Gulf and Europe,” he added.
The only stray deal reported in the market was heard from Godavari Ispat and Power Limited (GIPL) at a price of around $185/mt CFR with a China-based trading firm.