Demand for Indian pellets has turned subdued in China, however Indian pellet exports are gaining momentum in other markets like South Korea, Malaysia and Europe.
Demand for pellets in China has come down in last few weeks and buying sentiments have weakened. Pellet premiums have witnessed a downtrend this week owing to reduced pellet offers. Price assessment for Indian pellets stands at USD 109-110/MT, CFR China. Spot pellet premium for Fe 65% grade assessed this week at USD 42.35/DMT, CFR China, down by USD 0.95/DMT W-o-W. India’s pellet exports to China in Apr’18 with imports at 0.37 MnT, down 30% M-o-M as against 0.53 MnT in Mar’18. South Korea stood the second largest importer at 0.11 MnT followed by Vietnam at 0.05 MnT.
Amid weakening demand from China, Indian pellet exporters have started to actively look out for other markets like Malaysia, Europe and South Korea.
KIOCL (Kudremukh Iron Ore Company Limited) – a southern India based state-owned company with an annual capacity 3.5 MnT iron ore pellets had invited export tender for 50,000 MT Pellets (Fe 64% grade with low alumina content). According to market sources report to SteelMint,the pellet maker has concluded the tender at around at USD 106/MT, FoB India. The cargo is likely to be shipped to non-Chinese market.
Earlier, this week, an East India (Odisha) based pellet maker was heard to have concluded an export deal for about 29,000 MT pellets to Malaysia, at around USD 107/MT, CFR basis, considering freight of USD 7-8/MT. According to customs data maintained with SteelMint, the vessel named ‘Rojarek Naree’ is expected to arrive at Paradip port on 11 May’18 .
Recently, Jindal SAW – a west based pellet maker was also heard to have concluded export deal of 55,000 MT pellet to South Korea. The material is likely to be shipped to South Korea in 1st half of June.
SteelMint also learned from market sources that inquiries for Indian pellets is increasing from European nations. Pellet sales from Iron ore Company of Canada (IOC) has reported a drop of 13% Q-o-Q in its pellet & concentrate production in Q1 2018. At IOC, the revised guidance for 2018 production is 10.3-11.3 MnT of iron ore pellets and concentrates (previously 11.5 to 12.5 MnT). Fall in pellet production from Canada could have resulted in shift of European nations towards Indian pellets.
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