Ex-India pellet prices remained under pressure and inched lower, while no deals were successful over the past week with buyers from China not submitting bids and preferring cheaper lumps and fines following production cuts, SteelOrbis learned from trade and industry circles on Friday, June 14.
Ex-India pellet prices fell $2/mt to the range of $110-112/mt CFR China, but no deals were reported in absence of buyers and sellers were reluctant to push sales as current prices entailed almost negative margins.
Sources said that domestic sales realizations were about INR 2,000/mt ($24/mt) higher, on ex-plant basis than export margins and hence no incentive to sell overseas.
“Most local pellet producers are holding back volumes and waiting for the market to improve and offer positive margin. The hardest hit is for producers which have volumes at port stockyards incurring costs. Diverting such stocks to local mills also entail additional transportation charges,” a member of Pellet Manufacturers’ Association of India (PMAI) said.
“The current extreme bearish conditions are expected to sustain as blast furnaces in China are not opting for premium pellets and shifting to lumps and fines, following production cuts and weak finished steel prices. Also, port stocks in China on the higher side, close to 7 million mt too will be sufficient to meet limited demand and push back the immediate need for restocking,” he said.