Indian iron ore pellet export prices have recovered slightly towards the close of the week, largely riding on the back of speculative futures trading for raw materials, but buyers have largely stayed away from fresh bookings in view of the long Chinese holiday and the uncertain outlook of finished steel prices.
Market sources have said that ex-India iron ore pellet prices have recovered marginally by $2-4/mt to the range of $187-192/mt CFR China, against $185-188/mt CFR a week ago, but only stray deals for comparatively low volumes have been concluded, with buyers unwilling to conclude large transactions as market conditions after the Chinese holiday remain unclear.
The price recovery of high grade iron ore fines in China has not been as expected ahead of the holiday and anticipated raw material restocking has been lower than usual, tempering demand for higher-priced pellets.
“Chinese buyers have been seen to be retreating from the local market for the holiday much earlier than in normal years. We are not sure whether this is because of a new wave of the pandemic or a bearish mood over the finished steel price outlook or a combination of both,” a member of the Pellet Manufacturers’ Association of India (PMAI) said.
“Availability of higher grade fines from local Indian merchant mines is very tight with steel mills increasing volumes purchased and miners increasing focus on exports, which increased 63 percent in April-December 2020. Domestic pellet producers are facing dual challenges of accessing raw materials - higher grade fines - for conversion and buyers’ reluctance in accepting higher prices,” he said.
Sources said that Rashmi Group has reported a trade for an estimated tonnage of 20,000 mt for end-of-April delivery at a price of around $190/mt CFR China for a higher grade of alumina content less than three percent. Essel Mining Group company concluded a trade for 30,000 mt at a price of around $185-187/mt CFR China, the sources said.