India’s iron ore pellet export market has started slipping during the past week both in prices and volumes in reaction to falling raw material prices in China, Chinese finished steel prices failing to hold, and producers in China sharply reducing restocking of imported inputs.
According to local pellet producers and traders, Indian pellet export prices have declined by $2-5/mt to $126-128/mt CFR China, but the lower price has failed to increase trading activity, which has remained restricted to stray small-volume contracts.
Market sources said that, with Chinese finished steel prices losing momentum, blast furnace operators have been staying away from restocking raw materials, including imported pellets, and their existing local stocks have been sufficient.
The sources said that, among the stray small-volume trades was one concluded by Essel Group company for an estimated volume of 20,000 mt at the lowest end of the range of around $124-126/mt CFR. Brahmani River Pellets Limited (BRPL) has reportedly concluded a deal for 15,000 mt at $126/mt CFR.
“With Chinese finished steel price movement losing ground, there are reports that producers are looking at lowering plant output to support prices. If Chinese steel prices fail to consolidate, signs are emerging that pellet prices too are at risk of entering negative territory,” a member of the Pellet Manufacturers’ Association of India (PMAI) said. “The downside adjustments in ex-India pellet prices have been conservative over the past few days. Exporters are waiting and watching. But outlook is certainly bearish in view of negative price movements in the Chinese steel industry,” he added.