Indian iron ore pellet export prices have fallen marginally over the past week and trading activity has weakened slightly with buyers preferring to avoid year-end transactions.
Conflicting short-term market dynamics of the slight weakening of raw material futures prices and at the same time reports of low iron ore stocks at Chinese ports have confused buyers and steel mills also eased off their restocking operations in the last week of the year.
Market sources said that ex-India pellet prices edged marginally lower by around $2-3/mt to around $173-178/mt CFR China, but at least two Odisha-based producers said that, even though prices are expected to move within a narrow range in either direction, downside risks will be limited by the shortage of fines available from merchant miners in the local market and by at least a few domestic steel mills shifting to pellets as feedstock as higher grade lump supplies were getting tight, largely from mines in Odisha.
“We expect pellet prices to move within a narrow range of $2-5/mt at higher levels. Finished steel prices are still on an uptrend and in the medium term the easing of the Chinese winter season will see higher raw materials restocking by steel mills,” a member of the Pellet Manufacturers’ Association of India (PMAI) said.
“There are reports available locally that shipments from Brazil may rise in the next quarter and this may trigger a technical correction. But we do not see this gaining much momentum as finished steel prices are showing a sustainable rally in most key markets,” he added.
Sources said that Brahmani River Pellets Limited (BRPL) has concluded a contract for an estimated tonnage of 25,000 mt at a price of $175/mt CFR China for April delivery.
An Essel Mining pellet producing affiliate has reported a trade of around 30,000 mt at a price of around $178/mt CFR China for end-of-March delivery, the sources added.