SteelMint: India’s pellet export index edges up w-o-w

India’s pellets export trades remained largely stable compared to last week. SteelMint’s India pellet (Fe 63%, 3% Al) export index, FOB east coast, was assessed at $118/t, inched up by $1/t w-o-w. The market remained silent as most market participants are out of it for Lunar New Year celebrations.

The trading activities at the portside remained calm as most market participants were done with their procurement ahead of the Lunar New Year holiday. At the mid of last week few deals were heard concluded by an eastern India-based pellets manufacturer at $7 premium to fines index and another by a Southern India-based pellets maker at around 127/t FOB east coast, for 50,000 t each.

India’s pellets export shipments were recorded at 171,200 t in the second week of January 2023 in comparison with 75,000 t in the previous week, according to vessel line-up data maintained with SteelMint. 

Rationale

• No deals was reported this week hence not taken under T1 trade and given 0% weightage in the index calculation.  Click here for methodology
  
• Eight (8) indicative offers, and bids were received, and seven (7) were considered for calculation of the index, given 100% weightage.

Market highlights

• Export realisations increase w-o-w  : As per SteelMint’s analysis, domestic pellets (Fe 63%, 3% Al) offers increased sharply at INR 9,800-9,900/t ($121-122/t) loaded on to wagon for Barbil, eastern India. On the other hand, SteelMint’s pellets export prices ex-plant for the Barbil region remained stable at around INR 7,800/t ($96/t). 
• Global iron ore prices down on sluggish demand for February arrival cargoes: The benchmark Fe 62% fines index fell by $0.65/t w-o-w on 17 January to $121.5/t CFR China as against $122.15/t a week ago. The spot prices of iron ore in China slightly decreased w-o-w due to slow buying for February arrival shipments since steel mills’ restocking was nearly finished before the Lunar New Year holidays.
• DCE iron ore futures edge down w-o-w: Iron ore futures on the Dalian Commodity Exchange (DCE) for May 2023 contract closed on 18 January, 2023 (at 3 pm) at RMB 841.5/t, inched down by RMB 6/t ($1/t) as against RMB 847.5/t on 11 January. Prices rose by RMB 6.5/t ($1/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 5.25 mnt a week ago.