SteelMint’s weekly pellet export index (FOB east coast India) for Fe 64% grade has increased by $8/t w-o-w to $190/t. Although the bid-offer disparity has resulted in thin trades in last one week, but Indian pellet makers and traders are very optimistic about the demand pick-up in China and hike in offers in the upcoming days.
In a confirmed trade recorded by SteelMint, an eastern India (West Bengal) based pellet maker has concluded an export deal for 55,000t at $207-208/t CFR China for Fe 63% pellet and 4% Al for April loading. In addition to it, a deal of low Alumina pellets was heard to have concluded at just over $230/t, CFR China.
With plans for emission cuts in place and higher steel margins for finished steel, demand for medium and high-grade ore/pellets is expected to remain strong. However few traders cited production curbs have limited raw material buying inquiries this week.
While talking to SteelMint a trader revealed that currently offers and bid prices have widened by around $7-8 . Buyers are asking cargo at the cheaper rate and holding back their buying, another trader highlighted.
Domestic pellet prices are also playing a major role these days to determine export offers as offers have hit all-time high. SteelMint’s domestic pellet index PELLEX has increased further sharply by INR 800/t last week to INR 13,600/t DAP Raipur. Prices have kept on increasing on the back of increased iron ore lump offer by the Odisha’s leading miners.
Rationale:
- One pellet export deal was concluded in this publishing window. Hence taken into consideration for price calculation as T1 inputs and kept the weightage of 50% in this index.
- Apart from trades, SteelMint has also received ten (10) indicative prices, offers and bids (T2). Out of which eight (8) were considered as T2 trades and given weightage of another 50% in this index.
Spot iron ore fines price increased by $6/t w-o-w- Spot iron ore fines Fe 62% price increased to $170.85/t yesterday as against $ 164.75/t a week before. The mills procurement preference had turned towards medium and highe-grade materials. On daily basis also prices have increased around $3/t yesterday.
Freight rates down this week- Freight rates for 50,000-55,000t export vessels from east coast India (Paradip) to China decreased to$ 20-21/t against $ 24-25/t last week.
Pellet inventories at Chinese ports increased slightly – Pellet inventory at major Chinese ports have increased marginally to 5.25 mn t last week against 5.2 mn t a week before as per data maintained by SteelHome.
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