Indian iron ore pellet export offers have staged a smart recovery during the past week riding on strong restocking by Chinese steel mills and fines prices surging, but a divergent outlook for the price trend exists for China after its holiday, SteelOrbis has learned.
Market sources said that Indian pellet exporters have increased prices to the range of $129-133/mt CFR China compared to deals concluded at $124-126/mt CFR last week.
The number of buyers representing Chinese steel mills increased during the past week and the response to higher offers was strong amid restocking ahead of the holiday. But average booking volumes remained cautious and conservative as there is strong divergence in sentiments and opinions on price trends once business activities resume after the holiday.
One section of buyers maintained that supply constraints as regards high grade fines already seen emerging in the Chinese market would gain momentum post-holiday and this would provide support for ex-India pellet prices with producers in India setting a short-term price target of $135-138/mt CFR.
However, a section of the market said that a trend was emerging among Chinese steel mills of increasingly adopting the blending of high grade fines with lower grade fines to circumvent the rising price of the former and this raw material strategy would limit demand and hence the upward movement of ex-India pellet prices.
Sources said that an Essel Mining group affiliate pellet producer has concluded a trade for an estimated volume of 30,000 mt for end-November delivery with a China-based raw material trading firm at a price reported at $130-132/mt CFR.
Brahmani River Pellets Limited (BRPL) concluded a deal for a tonnage of 35,000 mt at price of $138/mt CFR for December delivery for high grade pellets with alumina content less than 2 percent with Chinese buyers.
A central India based pellet producer has reported a deal for 30,000 mt with a Singapore-based trading firm at a price of around $130-132/mt CFR, market sources said.