Ex-India pellet prices have declined and no significant trades have been confirmed with buyers staying on the sidelines waiting for improvements in finished steel prices, while sellers have not been pushing for deals, expecting the downturn in prices to be short-lived, SteelOrbis learned from trade and industry circles on Friday, July 19.
Ex-India pellet prices have lost around $5/mt over the past week, coming to the range of $112-114/mt CFR China, but the stray bids heard in the market have been even lower at around $108-110/mt CFR and hence no trades have been confirmed during the past week.
Sources said that, even after fall in ex-India prices, pellet sales in the domestic market have still been fetching margins INR 900/mt ($11/mt) higher on ex-plant basis, offering little incentive to sellers to be aggressive in selling overseas.
“Buyers representing mills in China are disinterested in restocking raw materials at a time when finished steel prices are weak. They are waiting for some kind of economic stimulus for the housing and construction sectors in China to improve sentiments among steel mills before committing deals for raw materials,” a member of the Pellet Manufacturers’ Association of India (PMAI) said.
“As for the sellers, they are preferring to wait and watch, expecting the current downturn to reverse. They are banking on policy reforms in China to be the next driver. Domestic demand for pellets is stable and hence it is not a problem to hold on,” he said.