Ex-India pellet prices have staged a robust recovery riding on the back of renewed large-volume deals for restocking ahead of the upcoming holiday in China and the improved macro-economic indicators in the country, SteelOrbis learned from trade and industry circles on Friday, September 27.
Sources said that ex-India pellet prices have recovered to the range of $108-110/mt CFR China from $94-97/mt CFR a week ago and a large number of deals are still under negotiation and are expected to be concluded early next week.
According to the sources, a southern India-based government-run pellet producer has floated an export tender for 50,000 mt, while an Odisha-based pellet producer has concluded a trade for 55,000 mt at $108/mt CFR.
A pellet-producing arm of an Odisha-based integrated steel mill has sold a tonnage of 50,000 mt at $108/mt CFR.
Sources said that a number of other deals are under negotiation at the higher end of the range at $110-112/mt CFR and are expected to converted into trades next week but not below the $110/mt CFR mark.
“The recent increase in futures and finished steel prices along with the economic stimuli from the government in China have instilled much more confidence among buyers to complete restocking ahead of the holiday. On the supply side, only a few sellers were able to conclude deals having ready exportable volumes at port stockyards. Sellers who were diverting volumes to domestic sales during the recent slump can be expected to enter the export market over the next few days with exportable volumes on offer,” a member of the Pellet Manufacturers’ Association of India (PMAI) said.
“However, caution is still advisable. Particularly, sellers are targeting a price at the higher end of the range and have not yet concluded a deal. It is possible that the surge will last just two or three days. Finished steel prices are still volatile and can move in either direction. Hence, mills in China can end their raw material restocking quickly,” he said.