Spot pellet prices in China surprises market as prices moved up sharply by around USD3-4/MT yesterday.
Indian pellet exporters reported to have increased inquiries for regular grade pellet in the last couple of days, SteelMint learned from market sources.
Current prices for Fe 64% pellets with alumina and silica 6%, heard to have increased to USD 110-111/ MT CFR China for July shipment, against last assessment of USD106-107/ MT CFR China.
According to participants, a price hike is a result of falling supply of pellets from Indian market coupled with falling domestic pellet production amid stricter environmental norms.
Notably, Indian pellet prices in the eastern region have increased by around INR 1000-1100/ MT in last few weeks and manufacturers prefer selling in the domestic market.
“There is improved buying interest from traders for the Chinese market. We heard some fresh restrictions being imposed on production in China. Export prices from India have increased to USD110-111/ MT CFR China.” said a pellet manufacturer in India.
Another exporter mentioned that he has received firm bids at USD 107/ MT CFR, a few days back, but he wants to hold his cargo as he expects prices to move up.
Indian pellet prices move up
Indian pellet prices have increased in last few trading sessions on account of the slow movement of iron ore due to logistical bottlenecks. Also, sponge iron manufactures prefer pellets over lumps during the rainy season, as iron ore lumps generate more fines. Current prices are hovering at INR 6200/MT loaded to wagons in Barbil (Odisha) and Durgapur INR 7000/MT.
Pellet premium for low alumina pellets move up
Pellets with lower alumina are attracting lot of interest from the Chinese and non-Chinese market. A recent deal by an Indian manufacturer explains that premium is as high as USD 58/ MT for Pellets carrying Alumina content below 2.5%.
An Indian exporter heard to have booked 55,000 MT low alumina Pellets at around USD124-126/ MT CFR Japan.
Chinese pellet imports Increased in Q1 2018
China import has increased by 11% in Q1 2018 to 5.43 MnT against 4.88MnT Q4 2017. India accounted for largest share of 1.84 MnT in imports, Brazil stood second at 0.9 MnT followed by the United States 0.49 MnT and Ukraine 0.46 MnT.
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