China’s pellet imports witnessed a decline of 51% y-o-y during Jan-Nov’21 to 21 million tonnes (mn t) as against 43.1 mn t in same period last year
India remained the largest iron ore pellet exporter to China accounting for 6.8 mn t out of 21 mn t total imports during Jan-Nov. However, imports from India have fallen significantly against 11.25 mn t in the year-ago period.
Ukraine was the second-largest source of pellet imports for China at 3.75 mn t followed by Australia and Brazil.
India slips to fifth spot
China’s pellet imports have remained stable on m-o-m basis in Nov at 1.35 mn t. India was the fifth-largest source of imports at 0.12 mn t against 0.1 mn t in the previous month. India’s pellet export market continues to remain silent on lacklustre trading since a few months.
China’s pellet imports in Jan-Nov’21 and Jan-Nov’20
Fig in mn t
Source: SteelMint
Why are imports falling?
- The ongoing winter steel production curbs and sintering restrictions continued to weigh on iron ore and pellet demand in China.
- Since lump has better cost performance than pellet, the proportion of lump usage and short-term lump demand may increase.
- China’s domestic ROM production has increased to 880 mn t during Jan-Nov’21 against 868 mn t in CY’20.
- Lower realizations in exports kept Indian pellet-makers on the sidelines. SteelMint’s pellet export index (Fe 64%, 3% Al, FoB east coast) fell from $150/t in mid-Oct to $125/t by mid-Nov.
Outlook: China’s pellet imports from India are likely to see an increase in the near term as traders have started taking position in anticipation of price hike post Chinese holidays. On the long term outlook, global pellet supplies are likely to enhance as Brazilian Samarco is also planning to ramp up production to 8 mn t next year from 7.7 mn t this year. Additionally, adding pellet capacities in India will also keep the supplies supported.
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