Indian pellet exporters may give only small discounts to Chinese buyers

Friday, 28 February 2020 15:28:26 (GMT+3)   |   Kolkata

Indian iron ore pellet exporters have been insisting on offers at $125-128/mt CFR China, supported by strong interest from domestic steel mills, while Chinese buyers have largely stayed away and have been asking for discounts, traders said on Friday, February 28.

Chinese steel mills are yet to determine capacity utilizations levels and have slowed down raw material restocking, but Indian exporters are unwilling to aggressively push for deals as much of their production is being picked up by domestic steel mills and the price differential between local sales and exports has shrunk since early this month.

Market sources said that Godavari Power and Ispat Limited, which operates an iron ore pelletization plant for commercial sales, has concluded a small-volume deal at $126/mt CFR China for April delivery.

The sources said that Brahmani River Pellets Limited (BRPL) submitted an offer at $128/mt CFR, but in negotiations this was unacceptable, while the exporter was unwilling to adjust CFR prices in view of higher freight forwarding charges for tonnages through Indian ports.

Indian exporters are not likely to adjust prices to push trades as domestic steel mills are booking larger volumes at prices in the range of $121-123/mt excluding taxes, eliminating any possibilities of an inventory build-up from lower export volumes.

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