SteelMint’s pellet export index (FoB east coast India) has remained largely stable on weekly basis and stood at $126.5/t on 28th Oct’20. Market participants still expect Chinese stricter pollution control norms to boost pellet demand in coming term, however some traders highlighted market to have remained less active.
One pellet export deal was heard to have concluded for 55,000 t from eastern India. The deal was concluded at around $136/t CFR, China for Fe 63% and 3% Al pellet for mid Nov’20 shipment. However, this deal was normalized for Fe 64% and then considered for calculation of index.
Rationale: Single confirmed trade (T1) received so far this week, therefore it has been taken into index calculation as T1 inputs and given 50% weightage.
SteelMint has received around three indicative prices (T2) and they were taken into consideration with an average price of $126/t FOB India.
Spot iron ore fines price remains range-bound – Chinese spot iron ore fines (Fe 62%) fell by around $4/t on weekly basis and stood at $ 115.7/t CFR China yesterday against $120.4/t a week before. However, on a daily basis, the price has inched up by $0.5/t yesterday.
Pellet inventory at major Chinese ports has increased by around 0.24 mn t to 11.25 mn t last week as per Steelhome data.
Chinese steel mills are still less active to buy pellets on increased port-side inventories. However, production cuts may support pellet demand in long run.
Major pellet makers from Barbil increased offers in the domestic market this week. SteelMint’s pellet price from Barbil (Odisha) stands at INR 8,000/t (Loaded to wagon) this week, up by INR 200/t w-o-w. Domestic market is still more lucrative than the export realization. Pellet export is fetching realization lower by INR 200/t (around $3/t) than prevailaing domestic offers of Odisha based maker, as per SteelMint’s analysis.