- Domestic-export realisation gap widens to over INR 1,000/t
- Low-alumina iron ore continues to attract seaborne buyers
Indian pellet export prices fell by $2-3/t this week as global indices declined and seaborne demand softened. Chinese buyers, seeking cheaper options, further pressured Indian-origin pellet prices. A few low-alumina deals were concluded, while transactions from the east coast had been finalised last week. However, most suppliers struggled to secure deals as buyers remained cautious.
BigMint’s India pellet (Fe 63%, 3% Al) export index (FOB east coast) decreased by $3/t w-o-w to $102/tonne (t) on 26 February 2025. A few eastern India-based exporters sold 115,000 t (Fe63%) at $114-115/t CFR China in the middle of last week, while trades remained muted this week amid lower prices.
An east coast-based seller said, “Currently, we are not active in the market, but prices for pellet exports have fallen in the last few days. The gap between export prices and domestic realisations has now widened. Trades are expected to conclude in the coming days.”
This week, an export tender for pellets with lower alumina content witnessed a positive response; however, bids dropped by $2/t compared to the last tender. An Indian pellet-maker concluded an export deal for around 50,000 t (Fe 63%, 2% AL2O3) at $106/t FOB India yesterday, sources informed BigMint.
The gap between export and domestic realisations has widened w-o-w. Domestic prices exceeded export offers by INR 1,100/t ($13/t) w-o-w compared to INR 750/t ($9/t) last week. Pellet (Fe63%) prices in Odisha’s Barbil were recorded at INR 8,050/t ($92/t) exw, up INR 100/t ($1/t) w-o-w. Meanwhile, ex-plant realisation in exports from Barbil stood at INR 6,950/t ($80/t) exw.
A source said, “Indian pellet offers have dropped, but buyers are reluctant to commit due to expectations of further price corrections. We are holding back offers, hoping for better realisations in the coming weeks.”
Domestic pellet prices in the eastern region rose due to increased production costs following a hike in iron ore fines prices. Despite weaker exports, domestic margins remain healthy.
A pellet exporter informed: “Domestic demand is stable, and price hikes in raw materials are pushing pellet prices up. However, port-based plants remain cautious, awaiting improvements in seaborne prices.’
Additionally, raw material supply to China has increased with improved weather conditions in Australia. Market participants expect price volatility to persist, with potential deals in the coming days.
Rationale
- No confirmed deals were recorded in this publishing window from India’s east coast for T1 trade. Thus, this category was taken into consideration for today’s price calculations and accorded 0% weightage in the index calculation. Click here for detailed methodology.
- Eleven (11) indicative prices were received, and Seven (7) were considered for calculation of the index and given 100% weightage.
Factors impacting pellet exports
- Chinese iron ore fines prices drop w-o-w: The benchmark iron ore fines index inched down by $1/t w-o-w to $107/t CFR China on 25 February. Adverse weather has hindered Australian shipments from recovering, supporting the premium for medium-grade fines. Buyers are adopting a wait and watch approach ahead of the two sessions and prices may rise in early Apr on expectations of a likely stimulus announcement in the high-level meeting.
- DCE iron ore futures edge down: Iron ore futures on the Dalian Commodity Exchange (DCE) for the May 2025 contract inched down by RMB 8.5/t ($1/t) w-o-w to RMB 812/t ($111/t) on 26 February. On a d-o-d basis, futures prices remained stable.
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