Indian Iron ore pellets with lower alumina content are becoming popular in Chinese as well as non-Chinese markets.
According to market sources report to SteelMint, an Odisha based pellet maker has recently concluded a pellet export deal (with 3% alumina content) to Europe at USD 114/MT, CFR considering freight of about USD 18/MT.
As per sources, another Indian pellet maker concluded pellet export deal (Fe 64% and alumina at 2.50%) to European market at USD 112/MT, CFR. There is increasing demand for pellet with low alumina content in Chinese and non-Chinese markets.
At IOC (Iron Ore Company of Canada), the revised guidance for 2018 production is 10.3 to 11.3 MnT of iron ore pellets and concentrates (previously 11.5 to 12.5 MnT). The local union workforce voted to strike and operations were suspended from that date.
This may turn European steelmakers to look for Indian pellets market to make up for the supply gap.
Chinese steel mills preference shift towards high grade pellets
Due to environmental regulations and stricter policies for efficient production in China, steel mills have increased need for material with lower alumina but are unwilling to pay higher prices resulting in lower Indian pellet exports to China. Therefore, Indian pellet exporters have started to actively look out for other markets like Europe, Malaysia and South Korea.
Pellet makers with comparatively higher alumina content are looking for export offers at around USD 108/MT, CFR China but bids are heard around USD 2/MT lesser than sellers expectations.
BRPL had concluded pellet export deal to China, towards mid of last week for 55,000 MT pellet at around USD 107/MT, CFR basis.
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