Ex-India pellet prices have continued to consolidate at higher levels touching a three-year high and, even though the number of trades has been fewer, the large volumes in trades concluded have prompted sellers to push up prices, anticipating that restocking by mills in China will gather momentum, SteelOrbis learned from trade and industry circles on Friday, January 5.
Ex-India pellet price are up $2/mt to the range of $144-147/mt CFR China and, though the number of confirmed trades has been fewer attributed to year-end considerations, the large volumes in deals concluded have boosted sentiments and the outlook of sellers for the months ahead.
The sources said that an eastern India-based pellet producer has reported a trade for 75,000 mt at around $145/mt CFR, while a southern India-based pellet producer has reported a trade for 50,000 mt at $146/mt CFR.
Another pellet plant of an Odisha-based integrated steel mill has concluded a trade for 50,000 mt at $146/mt CFR, the sources said.
“Sellers are quoting higher prices, anticipating restocking will gain momentum as business activity rises after the New Year holidays and ahead of the Lunar New Year holiday in China. 2023 was extremely good for local sellers in terms of prices and trade volumes estimated by the industry at 11 million mt compared to 5 million mt in 2022. The trend is expected to be sustained through the current year too, providing headroom for local sellers to push up prices,” a member of the Pellet Manufacturers’ Association of India (PMAI) said.
“At the same time, there are still uncertainties over growth momentum in China. If finished steel margins do not improve, mills can be expected to cut input costs by shifting to lower grade fines, impacting overall demand for higher priced pellets. So, sellers will have to exercise caution on irrational exuberance and not push up prices too much, too fast,” he said.