Indian iron ore pellet export prices have been kept unchanged at higher levels in view of the high price of fines in the local market, but trades have been muted by fines prices losing momentum in China during most of the week, SteelOrbis learned on Friday, October 30.
But the outlook for ex-India pellet has remained positive amid reports that winter sintering restrictions on Chinese steel mills will be widened from next month onwards.
Market sources said that ex-India pellet prices have been maintained at $130-133/mt CFR China, but trades were limited by buyers’ expectations that fines prices, which went through a short-lived rebound, will seek lower levels amid higher shipments by global resource majors and higher port stocks.
Buyers, particularly raw material trading firms in China, have remained quiet in responding to Indian pellet offers amid reports that steel mill production was stable and inventories are on the higher side, which would ensure that raw material restocking by Chinese steel mills will be at a low level in the short term.
The sources said that an Essel Mining pellet manufacturing subsidiary concluded a trade for 30,000 mt of high grade pellet with alumina content of less than two percent for January delivery at a price of $133-135/mt CFR China.
Godavari Power and Ispat Limited (GPIL) has reportedly concluded a trade for 25,000 mt with a Chinese buyer for end-of-December delivery at a price of around $130/mt CFR, the sources said.
“There are conflicting dynamics at play in the global pellet market. Indian exporters will keep prices stable nonetheless in view of the rising price of fines in local merchant sales by miners,” a member of the Pellet Manufacturers’ Association of India (PMAI) said.
“Competing pellet shipments from Brazil are showing a downtrend with reports here indicating that it is down around 30-40 percent since January. But on the contrary, fines shipments to China are rising which may prompt lower usage of higher-priced pellets. Indian pellet exporters are expecting that the fall in fines prices and the trend of blast furnaces in China moving to higher volumes of fines usage will be checked by winter sintering restrictions and hence they are keeping export prices stable even though the upside potential might be limited from current levels,” the PMAI official added.