SHANGHAI, Mar 13 - Pellet premiums continued to decline last week, while lump premiums also began to fall. Although the production of domestic pellets has been low recently, high prices of imported pellets have also weakened the purchasing interest of steel mills. While there were trades of some Indian pellets, no deals of Iranian pellets were made. Thanks to the cold air, the weather in Hebei has improved, and the production restrictions of sintering machines may be lifted, which dampened lump demand. In this scenario, premiums of both pellet and lump fell last week.

This week, domestic concentrates output will increase due to the ending of production restrictions after NPC and CPPCC, and operating rates of pelletising plants will also rise, growing domestic pellet inventories. Imported pellet, on the other hand, has no cost efficiency given its low inventories. Pellet premiums are expected to fall further. Demand for lump has been poor since the beginning of this year due to its high prices. When combined with the ending of the heating season, lump premiums should continue to decline.