- Export market quiet amid low buying interest for pellets
- Indian mills focus on domestic sales
The Indian pellet export market remained largely rangebound this week, with trading activity staying muted amid minimal buying interest from overseas, particularly China. Market participants attributed the subdued sentiment to the Chinese Labour Day holidays, observed from 1 to 5 May, which halted inquiries and restricted trade flow.
BigMint’s India pellet (Fe 63%, 3% Al) export index (FOB east coast) inched up by $0.5/t w-o-w to $94/t on 7 May 2025 against the previous assessment on 30 April. No export deal was recorded in this publishing window.
Only one or two prominent Indian exporters reported receiving limited overseas inquiries, which remain well below prevailing offer levels. As a result, most Indian sellers are shifting their focus to the domestic market, where demand has shown relative stability.
An eastern India-based pellet producer informed, “Domestic demand has held up reasonably well, and with limited buying from overseas, our priority has shifted to the local market for now.”
Domestic prices exceeded export offers by INR 1,800/t ($21/t), and slightly narrowed compared to last week as domestic prices witnessed a w-o-w drop. Pellet (Fe63%) prices in Odisha’s Barbil were recorded at INR 7,950/t ($94/t) exw, firm w-o-w. Meanwhile, ex-plant realisation in exports from Barbil stood at INR 6,150/t ($73/t) exw.
For now, pellet prices remain rangebound, and while immediate recovery in export volumes appears unlikely, any uptick in Chinese demand or tightening global pellet supply could lift sentiment in the coming weeks.
Chinese mills are reportedly turning to more competitively priced pellets from other regions, further limiting India’s export opportunities. An exporter informed, “Most Chinese buyers were away from the market due to the holiday period, and even now they are reluctant to resume buying as they are eyeing cheaper pellets from other origins.”
Despite the holiday lull and weak export interest, some market participants remain cautiously optimistic about near-term price stability. A market participant mentioned, “The holidays impacted sentiment, but we expect some support for pellet prices going forward. This may encourage a few deals to materialise.”
Rationale
- No confirmed deals from India’s east coast were recorded in this publishing window for T1 trade. Thus, this category was not taken into consideration for today’s price calculations and accorded 0% weightage in the index calculation. Click here for the detailed methodology.
- Nine (11) indicative prices were received, and nine (9) were considered for the calculation of the index and given 100% weightage.
Factors impacting pellet exports
Chinese iron ore fines prices stable w-o-w: The benchmark iron ore fines index remained largely stable w-o-w at $99/t CFR China on 6 May. Despite speculation regarding steel production cuts, prices remained firm this week, as demand for downstream products picked up. Increased trade for non-mainstream and low-grade products continued to drive expectations of a shift in demand patterns due to lower blast furnace productivity.
DCE iron ore futures unchanged w-o-w: Iron ore futures on the Dalian Commodity Exchange (DCE) for the May 2025 contract remained largely stable w-o-w at RMB 708/t ($98/t) on 7 May. On a d-o-d basis, futures remained firm.
Outlook
As per BigMint’s analysis, pellet export offers will remain largely rangebound in the near term and trade activity is unlikely to pick up momentum as sellers are getting better inquiries and margins in the domestic market.
Leave a Reply