The ex-India pellet trade has showed signs of cooling down in the past week, with prices edging marginally lower and with sellers holding back offers with the earlier uptrend losing steam. Buyers from China are currently not interested in higher-priced raw materials in view of soft finished steel prices, leading to inactive market conditions, SteelOrbis learned from trade and industry circles on Friday, July 12.
Ex-India pellet prices have dipped a marginal $1/mt to the range of $117-119/mt CFR China. But sellers have held back from submitting offers, disappointed by the easing off of the surge in prices seen earlier, and have preferred to await the next upturn.
At the same time, traders representing mills in China have not been interested in restocking as mills are unwilling to use higher-priced raw material at a time when the finished steel market is showing fresh signs of weaknesses, the sources said.
“The export market is in a stalemate situation. Sellers are expecting prices to consolidate at $122-124/mt CFR before resuming submission of offers. But there are no buyers in the market. It is not viable to use premium raw material when steel prices are under pressure,” a member of the Pellet Manufacturers’ Association of India (PMAI) said.
According to an official at a pellet producing arm of an Odisha-based steel mill, port stocks in China are sufficient to meet the relatively low demand from Chinese mills.
Also, spot prices are lower than seaborne cargoes presently, and hence buyers are not compelled to commit fresh deals, he said.