Indian iron ore pellet export markets showed high degree of volatility with prices surging early this week only to lose ground rapidly with buyers retreating on reports of emission restriction norms on Chinese steel mills and logistic challenges faced by sellers at the local levels from pandemic control restrictions, SteelOrbis learnt from trade and industry circles on Friday, April 23.
Sources said that ex-India pellet prices breached the $230/mt CFR mark, reaching about $232-235/mt CFR, but fell back to the range of $228-230/mt CFR, a shade up trades concluded at $227-230/mt CFR a week ago.
“As reports came in that more Chinese steel mills coming under emission and production restrictions, buyers retreated and declined to respond to offers. The new restrictions have once again opened up debate and assessment whether such restriction lead to lower aggregate demand for raw materials. Or restrictions will trigger faster shift from lower grade ores, sintering operations towards higher demand for concentrates and pellets,” a member of Pellet Manufacturers’ Association of India (PMAI) said.
“Our assessment is that finished steel prices will remain robust through the fiscal, and higher realizations will ensure more aggressive restocking of higher grade raw materials. We are bullish and see ex-India prices breaching the $250/mt CFR over the next few quarters,” he added.
However, at least two officials in local resource companies said that pellet producers are facing logistic challenges in incoming and outgoing materials from their plants in view of differing lockdown conditions across regions and meeting delivery commitments which too are forcing at least few buyers to retreat the market.
A pellet producing affiliate of Essel Mining reportedly concluded an early week trade for estimated tonnage of 35,000 mt for June delivery at price of around $235-237/mt CFR, for high grade material of alumina content less than 3 percent.
However, that remained the stray deal at week’s highest level before prices suffered setbacks from retreating buyers.
Brahmani River Pellets Limited (BRPL) reported a trade of around 40,000 mt for June delivery at price of around $228-230/mt CFR, market sources said.