The uptrend in ex-India pellet export prices has gained momentum during the past week riding on a fresh round of restocking by Chinese steel mills and tightening of supplies, with a number of Indian exporters holding back trades, expecting better prices, trades and producers told SteelOrbis on Friday, January 15.
They said that, while at least one trade was concluded a shade below the $200/mt CFR mark at around $195-198/mt CFR China, several exporters have tended to hold back from concluding contracts, expecting prices to firmly consolidate above the $200/mt level before concluding higher-volume shipments to China.
Market sources said that, apart from one stray deal at a peak of $195-198/mt CFR level, most other deals during the week were concluded at around $190/mt CFR China or slightly above, compared to $180-185/mt CFR a week ago.
“The rise in export prices is largely owing to reports of a fall in port inventories in China and rising volume deliveries to Indian steel mills. At least a few Indian pellet producers have reportedly turned down bids at around $190-195/mt and are not willing to commit contracts waiting for bids to consolidate at levels of $200-220/mt CFR, which is now a distinct possibilities, owing to short supplies from most exporting countries,” a member of the Pellet Manufacturers’ Association of India Limited (PMAI) said.
“The concentrate price is rising sharply in China, narrowing the price differential with pellets and prompting more mills to use low alumina-content imported pellets as blast furnace feedstock and hence the price is being fuelled by both the rising demand and tight supplies,” he added.
Sources said that a pellet producing affiliate of Essel Mining has reportedly concluded a trade for 40,000 mt for April delivery at a price of around $190-192/mt CFR China with alumina content less than three percent.
Brahmani River Pellets Limited (BRPL) has reported a deal for 45,000 mt at a price of around $190/mt CFR China, the sources said.