Indian pellet export prices have fallen further this week on limited trades. Buyers turned cautious owing to quarantine checks, concerns on delays in cargo deliveries amid COVID related guidelines in China for Indian cargoes. SteelMint’s Indian pellet export index (Fe 64% 3% Al, FoB east coast) has recorded a drop of around $3/t w-o-w and stands at $213/t.
Dalian Commodity Exchange (DCE) iron ore futures fell by 6% (d-o-d) as steel prices extended declines. DCE iron ore futures Sep’21 contract closed at RMB 994.5/t ($155.6) (-RMB 63.5). Following this, spot iron ore fines index is heard to have fallen sharply.
“There are very limited offers in the market currently owing to uncertainty prevailing amid quaratine measures in China. There is a lot of uncertainty at the moment on delays and added cost related to discharge/clearing seaborne Indian pellets which has kept buyers silent. At the same time domestic pellet prices have declined sharply owing to lack of demand”, a trader reported to SteelMint.
Majority of Indian pellet makers were seen adopting a ‘wait & watch’ approach. However, onne pellet export deal was heard concluded from Odisha based pellet maker for 35,000 t pellets at around $245-246/t CFR. But this deal was not considered in the index calculation as confirmation could not be received during the time of publishing this report.
“We are booked till mid-Jul for exports. Hence we are not in a rush to sell cargoes at a lower price” , highlighted another pellet maker.
Rationale:
- One pellet export deal was concluded in this publishing window however the deal was not considered for price calculation as T1 inputs and given the weightage of 0% in this index.
- Apart from trades, SteelMint has also received nine (09) indicative prices, offers and seven (07) were considered as T2 trades and given a weightage of 100% in this index.
Key market highlights-
Chinese spot iron ore fines prices down sharply- Chinese spot iron ore fines index moved down by $24/t to $191.6/t CFR China yesterday against $215.45/t CFR China assessed last week.
Freight rates remain unchanged- Freight rates for 50,000-55,000t export vessels from east coast India (Paradip) to China stand the same as last week around $ 24-25/t. However, vessel availability is a major concern.
Pellet inventories at Chinese ports stable – Pellet inventory at major Chinese ports stable to 3.8 mn t last week same as previous week as per data maintained by SteelHome.
Domestic pellet index down by INR 1,200/t – SteelMint’s bi-weekly domestic pellet index “PELLEX ” decreased by INR 1,200/t to INR 16,000/t DAP Raipur on 25th May ’21 due to bid-offer disparity.
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