Ex-India pellet prices have showed high volatility, surging ahead in trades early in the past week, but settling a little lower towards the close of the week, but still significantly higher week on week amid the resumption of buying from China and strong local demand, SteelOrbis learned from trade and industry circles on Friday, April 26.
Ex-India pellet prices rose rapidly early in the week, touching levels of $120-121/mt CFR China, but settling down to the range of $111-115/mt CFR, compared to $103-109/mt CFR a week ago.
According to sources, the price volatility has largely been attributed to the sudden rise in demand and the restocking by traders representing mills in China, while the volumes at port stockyards were diverted for local sales.
The sources said that a trade for 50,000 mt was reported by an Odisha-based pellet producer at a price of $120/mt CFR China. However, prices settled down and a trade later in the week for 30,000 mt was reported by another Odisha-based pellet producer at $115/mt CFR.
Similarly, a southern India-based producer reported a trade for 30,000 mt, also at $115/mt CFR, the sources added.
“From the buyers’ side, the demand increase is from mills in China heard to be increasing crude steel output and also stocks of imported iron ore at ports. On the sellers’ side, they have very low ready stocks at ports and some are holding back deals now that the downturn has been reversed and there is more upside potential,” a member of the Pellet Manufacturers’ Association of India (PMAI) said.
“However, we expect trade activity to slow down ahead of the May Day holidays. A more definitive price trend will emerge after that. Following the latest revival in ex-India prices, the gap between export and local sales prices has narrowed significantly. Hence sellers are taking a close look at bids and will sell wherever the margins are better,” he said.