India’s iron ore pellet exports have continued to remain inactive in response to sinking demand and the bearish outlook in China and bids collapsing below the $100/mt CFR mark prompting sellers to stay away, SteelOrbis has learned from trade and industry circles.
Sources said that, though official offers were maintained at $128-132/mt CFR China, no deals were workable given the further widening of the spread with bids for even small tonnages coming at $90-100/mt CFR compared to bids heard in the range of $100-110/mt CFR a week ago.
“The current situations in both China and India are similar in the sense that mill operators are bringing forward plant maintenance shutdowns in the wake of steadily falling demand and prices. This is making the outlook for raw material demand extremely bearish,” a member of the Pellet Manufacturers’ Association of India (PMAI) said.
“It is interesting and significant that the differential between the landed price of high grade imported iron ore and pellets in China is not more than $5-7/mt. But even then, mill operators are shunning the use of pellets as margins from finished steel are getting squeezed,” he said.
Industry sources said that an eastern India-based integrated steel mill with a pellet plant floated an export tender for around 30,000 mt for the second time this month and then cancelled also for the second time owing to the poor response from overseas buyers.
According to a PMAI official, information available from ports indicate that shipments during July would be close to zero, making evident the crippling impact of the 50 percent export tax imposed in May.