Ex-India pellet prices have consolidated at higher levels amid expectations of a resumption of restocking by mills in China and robust domestic sales, although only a very few deals have been confirmed in the market, SteelOrbis learned from trade and industry circles on Friday, May 3.
Ex-India pellet prices have been reported in the range of $120-122/mt CFR China, slightly higher than the deals at $115-120/mt CFR heard a week ago.
There was market chatter about a deal for a very large tonnage of 110,000 mt by an eastern India-based pellet producer at around $121/mt CFR, but no confirmation has been forthcoming from either traders representing the buyer or from the seller.
A government-run pellet producer has reported closing an export tender for 55,000 mt, but some traders claimed that a sales contract was not signed as the highest bid was below the expectation of the seller.
“There is a positive outlook for the market with sellers expecting mills in China to commence restocking once business activity gains momentum after the May Day holidays. However, it may also be that such mills will continue to prefer low quality fines over higher-priced pellets as margins from finished steel still remain weak. So, the expected big support for pellet prices may not be a reality,” a member of the Pellet Manufacturers’ Association of India (PMAI) said.
“Also, local sales realizations continue to be better by around INR 1,000/mt ($12/mt) compared to current export price. So, sellers will tend to hold back deals waiting for a further consolidation of ex-India prices,” he said.