Ex-India pellet prices have remained largely stable barring a stray deal at a higher price, even though more sellers have been active in submitting offers, following the narrowing of the difference between export and domestic sales margins, SteelOrbis learned from trade and industry circles on Friday, June 28.
Sources said that ex-India pellet prices are stable at $111-113/mt CFR, but one Odisha-based pellet producer is reported to have concluded a deal for 60,000 mt for mid-July shipment at $117/mt CFR.
The sources said that, though the stray deal boosted the sentiments and outlook slightly, buyers from China were still few and were putting in lower bids. There are reports received in India indicating port stocks in China to be stable at around 7 million mt, which is sufficient to meet current tepid demand for higher-priced raw materials, with Chinese mills continuing to focus on cheaper fines as finished steel margins remain under pressure.
“More local pellet producers are active in submitting offers as the margin differential between exports and local sales has narrowed to around $1,000/mt ($12/mt) compared to INR 1,600/mt ($19/mt) a week ago, after several large producers like Jindal SAW Limited dropped local prices,” a member of the Pellet Manufacturers’ Association of India (PMAI) said.
“But bids from China are still on the lower side, an average $2-3/mt lower than offers. They would need to consolidate higher for deals to be successful. One deal at a higher price cannot be said to be a clear portent except for a slight improvement in sentiments. Price gains need to be at higher levels of market activity to set an uptrend,” he said.