Seaborne pellet prices were higher in the week to today amid signs of a rise in demand.
The Argus 64pc Fe, 3pc Al pellet was assessed at $105/dry metric tonne (dmt) this week, up by 50¢/dmt from last week. The 2pc Al was assessed at $107/dmt.
A cargo of Rashmi Indian pellet was sold at $107/dmt. Some market participants said the deal price was higher than market levels, which were closer to $104-105/dmt.
"The pellet market looks positive for sellers at present. Buyers seemed bearish at the Cisa conference last week but buying has suddenly picked up," said a senior executive at a large Indian producer.
The indicative price for Indian pellet in the seaborne market is at around $105/dmt today. Portside prices were higher than seaborne cargoes since mills can buy smaller parcels of portside ores, said a Singapore-based trader.
A bid for Indian pellet with 3pc Al was at $106/dmt late last week, while Iranian pellet was offered at $120/dmt.
Demand for direct-charge material such as pellet and lump typically increases in the fourth quarter of year as mills stock up for winter, when availability of domestic concentrate falls because of the winter closure of mines.
Pellet prices were supported by Vale cutting its previous forecast for pellet output. Vale now expects to produce 43mn t of pellet in 2019, down from an earlier forecast of 45mn t, which may further squeeze supplies for the rest of the year.
A cargo of Iranian pellet was sold at Yn1,035/wmt on 30 September and a cargo of Indian pellet was sold at Yn970/wmt (seaborne equivalent of $120/dmt) at Tianjin port.
