Ex-Indian iron ore pellet prices have bounced back amid the strong revival of buying activity in the wake of reports of more widespread inspections of Chinese steel mills and rising demand for pellets and concentrates to further reduce sintering operations in China, SteelOrbis learned from trade and industry sources on Friday, April 16.
Indian pellet export prices have gained $7-10/mt to $227-230/mt CFR with a greater number of deals concluded predominantly by Chinese buyers, up from the tradable level at $220/mt CFR maximum late last week.
“Reports reaching us indicate that more steel mills across more regions apart from Tangshan would come under inspection for emissions control and the possibility of more widespread curbs on blast furnace operations,” a member of the Pellet Manufacturers’ Association of India (PMAI) said.
“As more mills limit sintering operations ahead of inspections, demand for pellets and concentrates as direct charge into blast furnaces is increasing, reflecting higher demand and support for higher ex-India pellets,” he added.
The PMAI official, along with at least two other pellet producers, forecast prices to breach the $230/mt CFR mark in the short term, and, if restrictions on Chinese steel mills continue until the year-end, the $250/mt mark could be a distinct possibility in the medium term as demand for finished steel is seen to remain robust through the current year.
One Odisha-based pellet producer said that, with state-run miner NMDC increasing iron ore fines prices by $7.5/mt, private Odisha-based commercial miners are expected to hike prices by a range of $8-10/mt and higher raw material costs for pellet producers would be passed on in higher pellet prices for bookings later this month.
An Odisha-based aggregating trader has reported a deal for an estimated volume of 35,000 mt of high grade pellet with alumina content less than three percent at around $228-230/mt CFR.
A pellet producing arm of Essel Mining has reported a trade of around 45,000 mt for June delivery at a price of around $228/mt CFR, sources said.
Jindal Steel and Power Limited’s pellet producing plant has reportedly concluded a trade for 50,000 mt for end of June-July delivery at a price of around $227-230/mt CFR, sources said.