Indian iron ore pellet exporters have been attempting to nudge up prices riding on iron ore prices consolidating at higher levels in China and low port stocks, but buyers have become cautious as regards concluding trades, preferring to wait for a new post-correction price trend to emerge.
Market sources said that major local pellet producers have pushed up export prices slightly to the range of $114-116/mt CFR China, while a few producers offering higher grade pellet (Fe content 63-65 percent with alumina content of less than three percent) were able to conclude deals at the higher price of $118-120/mt CFR.
This compares to trades concluded in the range of $112-114/mt CFR China in earlier weeks.
However, the sources said that, with sentiments becoming cautious over higher prices, the number of deals and volumes have been on the lower side, while exporters have maintained that low inventories both at steel mills and traders would support ex-India pellet prices in the medium term.
Sources said that Godavari Ispat and Power Limited concluded a deal for 45,000 mt for the end of September at the price of $114/mt CFR with a China-based trading firm.
State-run miner KIOCL Limited has concluded a deal for 50,000 mt of high grade pellet at a price close to $120/mt CFR, and, though the company did not divulge the identity of the buyer, markets sources have speculated that a major Chinese trading firm concluded the deal.
ASL Limited reportedly concluded a deal for 20,000 mt with a Singapore-based trading firm with Chinese steel mills at $115/mt CFR, market sources said.
An Odisha-based steel mill operating a pellet plant reported a deal for 25,000 mt for September delivery at $114-115/mt CFR with a trading firm operating under a China-based steel mill, the sources added.
“Higher prices of iron ore fines, and the resultant push to imported pellets has made the mood among buyers very cautious and created expectations for a price correction, prompting them to remain on the sidelines,” a member of the Pellet Manufacturers’ Association of India (PMAI) said.
“But we do not see a significant downside to the current pricing. The outlook of the raw material market remains positive as indicated by the continued tightness in supplies and the drawdown in inventories across market intermediaries in China,” he added.