Indian iron ore pellet export prices have continued to perform strongly during the past week with prices going up and, despite few trades being concluded, sellers have remained optimistic regarding resumption of restocking by Chinese steel mills ahead of the approaching Chinese New Year holiday, sources said on Friday, January 22.
Despite reports of negative sentiments among some buyers in a few regions in China, raw material prices are expected to be supported as supplies are expected to remain tight along with the rising price of higher grade lumps prompting mills to continue to opt for pellets during winter sintering restrictions.
Sources said that ex-India pellet prices have risen to $198-204/mt CFR China, versus $195-198/mt CFR last week. Sellers are optimistic about renewed restocking by Chinese steel mills ahead of the New Year holiday next month, which would enable prices to consolidate above the $200/mt CFR mark.
At least two traders said that there are reports in the market that state-run pellet producer KIOCL Limited reported a trade with a Chinese buyer at a price of around $208/mt FOB, but no confirmation was available from the seller on either the CFR value or the tonnage. However, market participants and traders translated the CFR value at levels of $218-220/mt for high grade with alumina content of less than two percent.
Market sources said that Rashmi Group has reported a trade at $204/mt CFR for March delivery, though no confirmation regarding the volume was available in the market.
Brahmani River Pellets Limited (BRPL) has reported a trade of an estimated 20,000 mt at a price of around $198/mt CFR China for end-of-March delivery, sources said.
“Rising demand for high grade lumps, tight supplies and sintering restrictions in some regions in China will keep supporting pellet prices,” a member of the Pellet Manufacturers’ Association of India (PMAI) said.
“Right now there are only a few trades above the $200/mt mark for the highest grade of ex-India pellets. The market is showing strong signs that the uptrend will gather momentum as trading activity increases. Indian supplies will continue to remain tight as pellet producers have limited access to merchant sourcing of fines from local mines,” he added.