China’s pellet imports witnessed a sharp decline of 55% in Oct’21 to 1.33 million tonnes (mn t) as against 2.95 mn t in Oct’20.
On a monthly basis, imports of the material decreased 15% m-o-m to 1.33 mn t in Oct’21 against 1.57 mn t recorded in Sept’21, according to China’s General Administration of Customs. Brazil became the largest iron ore pellets exporter to China in Oct’21, rising by 58% m-o-m at 0.41 mn t against 0.26 mn t in Sept’21. Ukraine was the second-largest pellets exporting country for China in Oct’21 with 0.38 mn t as against 0.31 mn t in the previous month. Imports increased for the month due to rising buying interest.
India slips to fourth-largest exporter in Oct’21
India was the fourth-largest iron ore pellets exporter to China in Oct’21, showing a fall of 71% m-o-m at 0.1 mn t in Oct’21 against 0.35 mn t in the previous month. Higher realisations in the domestic market limited pellet export bookings from India.
Reasons for fall in imports
- The ongoing winter steel production curbs and sintering restrictions continued to weigh on iron ore and pellet demand in China. China’s crude steel output fell for the fifth consecutive month in Oct’21 at 71.58 mn t, down by 3% m-o-m and 23% on an annual basis.
- The requirement for lower grades of iron ore pellets has been reduced which contributed to the fall in imports. Lower steel output saw these steel mills reducing their imported iron ore inventories.
- Over November 12-18, the blast furnace (BF) capacity utilisation rate among China’s 247 steel mills dropped to a new low since late Mar’18, according to Mysteel.
SteelMint’s pellet export index (Fe 64%, 3% Al, FoB east coast) rose from $100/tonne (t) to $147/t by end of Oct’21 compared to last month’s assessment. Despite a hike in export prices, Indian pellet makers turned inactive in domestic sales due to higher realisations.
On the other hand, SteelMint’s bi-weekly pellet (6-20mm, Fe 63%) index for the key central Indian market of Raipur, PELLEX, witnessed total transactions of 117,500 t in Oct’21 compared to 164,500 t in September, a decrease of over 29% m-o-m, as per data compiled by SteelMint.
Imports drop 52% in Jan-Oct’21
Total imports of iron ore pellets dropped 52% y-o-y to 19.66 mn t in Jan-Oct’21 against 41.15 mn t recorded in the corresponding period last year (CPLY).
Imports from India fell by 39% to 6.68 mn t in Jan-Oct’21 as against 10.92 mn t in CPLY. Bid-offer disparities and comparatively better realisations in the domestic market resulted in a fall in volumes from India.
China’s pellet imports in Oct’21 & Sept’21
Fig in mn t
Source: SteelMint
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