After a six week-long uptrend, ex-India pellet prices have hit a wall and lost ground amid a combination of buyers’ resistance to high prices and a much-expected market correction after the sustained rise, SteelOrbis learned from trade and industry circles on Friday, December 1.
Ex-India pellet prices are down by an average $6/mt to a range of $136-138/mt CFR China, but no deals have been reported during the week, as the bid-offer gap has been very wide even after sellers dropped their prices.
The bullish mood over the past few weeks was also deflated by reports that a tender-based export offer of 50,000 mt by a southern India-based pellet producer had to be cancelled after no bids were submitted, an indication of the sharp trend reversal.
The sources said that an export offer for 30,000 mt by the pellet plant of an Odisha-based steel mill failed following a bid of $130/mt CFR against a quote of $138/mt CFR from the seller.
“We hear about some nervousness among buyers from China following reports of government scrutiny of iron ore trading firms and futures contracts. The bid to check speculative trading in China prompted many buyers to pull out of the market early in the week,” a member of the Pellet Manufacturers’ Association of India (PMAI) said.
“The outlook has become uncertain. We are not sure whether the bullish market conditions will return. We are, however, sure that market will be volatile in the short term,” he said.