SteelMint’s weekly pellet export index (FOB east coast India) for Fe 64% grade has increased by $2/t w-o-w to $182/t. Market sentiments have remained optimistic on expectations of tighter steel supply due to key steelmaking hub Tangshan’s order to lower utilization rates by 25%-30% over the rest of this year in a bid to reduce air pollution.
However, Indian pellet export market has remained less active for yet another week as majority of pellet makers are likely to resume offers in early or mid-Apr for May shipments. However prices indications for standard grade pellets have inched up to $206-208/t CFR China. Traders highlighted that market has remained less active apart from a couple of low Alumina pellet export deals to have concluded last week for China.
On the other hand, domestic pellet offers in India have rallied sharply on the back of a sharp hike in iron ore lump offers. SteelMint’s domestic pellet index PELLEX has surged by INR 750/t against last weekend to INR 12,800/t DAP Raipur as on 31 Mar’21. Odisha’s leading miner – OMC had scheduled its next iron ore e-auction today. The base price has been increased further by INR 1,300/t over the base price released on 26th Mar. The auction is being conducted for 1.13 mn t iron ore lumps. Lump prices in Odisha have been increasing due to tight availability on limited offers as EC limit of few miners have been exhausted.
Rationale:
- No pellet export deal was concluded in this publishing window. Hence not taken into consideration for price calculation as T1 inputs and kept the weightage nil in this index.
- Apart from trades, SteelMint has also received nine (9) indicative prices, offers and bids (T2). Out of which six (6) were considered as T2 trades and given a weightage of 100% in this index.
Spot iron ore fines price increased by $7/t w-o-w- Spot iron ore fines Fe 62% price increased to $166.55/t yesterday as against $ 159.55/t a week before. The mills procurement preference had turned towards higher grade materials over given the constraints on capacity utilization and strong steel margins.
Freight rates remain stable – Freight rates for 50,000-55,000t export vessels from east coast India (Paradip) to China stable at $ 24-25/t this week.
Pellet inventories at Chinese ports fall – Pellet inventory at major Chinese ports have dropped by 0.6 mn t to 5.2 mn t last week against 5.8 mn t a week before as per data maintained by SteelHome.
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