Ex-India pellet prices have been pushed up by sellers, but workable levels have remained low due to the wide bid-offer disparity and as the expected post-holiday restocking by mills in China has failed to materialize, SteelOrbis learned from trade and industry circles on Friday, March 1.
Ex-India pellet offer prices have increased by around $5/mt to the range of $125-130/mt CFR China, but bids have been received at $115-120/mt CFR, resulting in silent trade conditions remaining.
The sources said that raw material restocking did not revive after the holiday, with mills in China reporting that pressures on finished steel margins were restricting interest in imports.
“Indian sellers tried to increase prices to compensate for low demand and prices in the domestic market. But this is proving to be counter-productive and no deals were working out as buyers were weighed down by pressures on steel prices,” a member of the Pellet Manufacturers’ Association of India (PMAI) said.
“Current bids received were not viable. But local sellers are not inclined to adjust prices to push deals. They are taking their cue from reports of a tightening of iron ore supplies from Australia to boost prices. So far, expectations of a fall in port stocks in China and a possible supply tightening have halted the decline of iron ore prices. But it is not clear whether this will be sufficient to offer upside potential offsetting the weak margins of mills,” he said.
According to an official at a pellet producing arm of an Odisha-based integrated mill, despite the fall in local merchant sale prices, they are still around INR 650/mt ($8/mt) higher than export realizations on ex-plant basis, prompting sellers not to adjust prices to force sales overseas.