Indian iron ore pellet export prices have come under pressure and lost ground during the past week, amid reports of a rise in stocks at Chinese ports and nervous trading conditions in the wake of the Sino-India border skirmishes resulting in the killing of soldiers on both sides, SteelOrbis has learned on Friday, June 19.
According to the traders, while Chinese buyers have largely stayed away from large-volume contracts, sentiment among Indian pellet producers has been impacted by rising tensions between the two neighboring countries, uncertainties regarding their impact on payments and India’s political establishment affirming its intention to retaliate to the killings along the Himalayan border.
Market sources said that exporters cut pellet prices to the range of $108-110/mt CFR China compared to trades concluded at $113-115/mt CFR China in the previous week.
Prices declined after a few deals concluded in the last week’s range. An Odisha-based aggregating trader reported a contract for end-of-August delivery of an estimated volume of 20,000 mt at a price of around $112.5/mt CFR China for grade with alumina content higher than three percent, the sources said.
Brahmani River Pellets Limited (BRPL) has reportedly concluded a contract for end-of-August delivery of 25,000 mt at $114/mt CFR China, but negotiations for a second August delivery contract have remained inconclusive, although sources could not elaborate on the cause of the talks being called off.
“The past week started off with reports of Chinese port stocks of pellets rising from 7.1 million mt to around 8 million mt, explaining the slight fall in buying appetite among China-based traders and steel mills,” a member of the Pellet Manufacturers’ Association of India (PMAI) said.
“However, later in the week, non-trading elements like rising tensions between India and China and clashes between the military forces of the two countries at the border unnerved the local industry. There is uncertainty how the situation will unfold amid the Indian government taking the official stance of making India less reliant on trade with China. The impact of this is still unknown, but the market is very nervous,” he added.