India’s pellet export trade has improved against last week. SteelMint’s India pellets (Fe 63%, 3% Al) export index, FOB east coast, was recorded at $108/t, up by $3/t w-o-w. A single deal of around 55,000 t of pellets was reported from eastern India-based players this week in the range of $119-120/t, CFR China for January, 2023 shipment.
India’s pellets export shipments were recorded at 0.13 mnt in second week of December, 2022 in comparison to 0.11 mnt in the previous week, according to vessel lineup data maintained with SteelMint.
The index seems to be improved but buying is still weak as buyers are keeping themselves away from the market. Buying interest has narrowed down on the rising Covid cases in China recently. However, a hike in Chinese iron ore futures today has lent support to market sentiments. According to some sources, the market is quite optimistic for post-new year holidays trade in China.
Rationale
- One deal was heard this week and was taken for price calculation under T1 trade and given 50% weightage in index calculation. Click here for methodology.
- Eight (8) indicative offers and bids were received and all were considered for calculation of the index and given 50% weightage.
Ongoing tenders:
- State-owned KIOCL has floated a tender for pellets (Fe63%, 8% SiO2+Al2O3). The due date for the tender is 22-23 December, 2022 and it has been floated only for empanelled customers.
Market highlights
- Domestic pellets realisations still higher: As per SteelMint’s analysis, domestic pellets (Fe 63%, 3% Al) offers are at INR 8,300/t ($100/t) loaded on to wagon for Barbil, eastern India. On the other hand, SteelMint’s pellet export prices on ex-plant for the Barbil region improved at around INR 7,100-7,200/t ($86-87/t). Owing to an improved index at the same time exchange rate, realisation has been increased on ex-plant this week.
- Global iron ore prices remain stable amid improved import margins: The benchmark Fe 62% fines index slightly up by $0.2/t w-o-w on 20 December to $110.5/t CFR China as against $110.3/t a week ago. The spot prices of iron ore in China inched up d-o-d due to better import margins.
- DCE iron ore futures up w-o-w: Iron ore futures on the Dalian Commodity Exchange (DCE) for May contract closed on 21 December, 2022 (at 3 pm) at RMB 829/t, up RMB 20.5/t ($3/t) as against RMB 808.5/t on 14 December, 2022. Prices moved up by around RMB 24.5/t ($4/t) d-o-d.
- Port inventories in China up w-o-w: Pellets inventory in China’s major ports stood at 5.6 mnt this week against 5.3 mnt a week ago.
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