Ex-India pellet prices have continued to suffer setbacks, falling to a three-month low, with buyers in China withdrawing and local sellers halting submission of offers, leading to zero trades being reported over the past week, SteelOrbis learned from trade and industry circles on Friday, July 26.
Ex-India pellet indicative prices have declined by $5/mt to the range of $107-109/mt CFR China, with stray bids heard below $100/mt CFR, which have been rejected by local sellers as they work out close to FOB price levels.
Sources said that on the buyers’ side there has been disappointment over the absence of any stimulus announcement from the government in China and, with some mills reported to be considering implementing maintenance shutdowns at a time when finished steel prices are indicating a fresh round of declines, demand for raw material has been weakening by the week.
“There is a significant fall in raw material demand. As finished steel margins are under pressure, mills in China prefer to shift to lower grade ex-Australia fines and are not interested in higher-priced ex-India pellets even after the recent fall,” a member of the Pellet Manufacturers’ Association of India (PMAI) said.
“Local pellet prices are down but local realizations on ex-plant basis are still higher by $10-14/mt compared to sales overseas. Hence, sellers have halted submitting offers and will wait for the next recovery before entering exports,” he said.