India’s iron ore pellet export prices have continued to show very high volatility, with prices surging early in the past week to touch the $250/mt CFR China mark, but failing to sustain their gains as buyers have been continuously revising their demand estimates and at the same time have been cautious in case they build up excessively high inventories, SteelOrbis learned from trade and industry circles on Friday, April 30.
Sources said that early in the week ex-India pellet prices rose to $245-250/mt CFR with the higher end of the price range applicable for high grade material with alumina content less than three percent. The gains were significant compared to trades at $228-230/mt CFR late last week.
However, similar to the trend a week ago, trade prices failed to be maintained in the higher range of around $245-250/mt CFR, as buyers started to retreat and deals were reported lower at round $235-240/mt CFR, the sources said.
“A number of factors have been contributing to the current volatile raw material market. In the short term, Chinese steel mills seem to be sufficiently stocked up ahead of the May Day holidays and therefore cautious about committing trades at higher prices,” a member of the Pellet Manufacturers’ Association of India (PMAI) said.
“In the medium term, there’s a lot of uncertainty over blast furnace capacity utilizations in China, leading to varied demand projections for raw materials, which are contributing to the volatility too,” he said, adding that the overall demand and price outlook is “very robust” and, despite short term dips and spikes, the downside risks to sellers are very limited.
Sources said that an Essel Group pellet plant has reported a trade for an estimated tonnage of 40,000 mt for June-July delivery at a price of around $250/mt CFR for high grade material of alumina content less than two percent.
A deal at a lower level for an estimated tonnage of 30,000 mt reported by Brahmani River Pellets Limited (BRPL) at a price of $235-240/mt CFR for end-of-June delivery was done late this week.