Eastern India based pellet maker-Jindal Steel & Power (JSPL) has resumed pellet exports after a long gap of around 2 years.
The pellet maker is likely to ship 60,000 MT pellets to China from Dhamra Port. SteelMint analyzed from the railway movement that the material loading for the export shipment has begun and very soon it will be exported to China.
As per sources, the export deal was concluded at USD 71-72/MT, CFR China.
Prior to this east India pellet manufacturers have shipped three export vessels since Mar’16. As per customs data the deals were concluded at around USD 63-64/MT, FoB India east coast. Freight from India to China is around USD 8/MT.
Brahmani River pellets is also actively participating in exports and has shipped 54,000 MT pellets to China so far in Apr’16.
Why east India pellet makers are getting inclined towards exports?
Subdued demand in domestic market- Pellet buying interest in domestic market is not encouraging. Current offers for Fe 63% pellets are in the range of INR 3,000-3,200/MT (loaded to wagons at Barbil). However market participants shared that sponge manufacturers are not showing much interest at current levels.
Rather than going for pellets, sponge iron manufacturers continue to prefer lump over comparatively high margin.
Sharp increase in global pellet index-Stronger steel margins in China have pushed up the prices of raw material as well. Prices for Fe 65% pellets have increased by USD 11/MT M-o-M and is currently assesed at USD 86.8/MT, CFR China.
Pellet premium ramps up to 7-month high- Seaborne pellet premium for Fe 65% BF grade pellets has moved up further this week by USD 3/MT. As per the latest assessment seaborne pellet premium is at USD 21/DMT, CFR China.
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