Strong Chinese pellet demand, favorable global market conditions as well as rising pellet premium have shifted interest of major Indian pellet makers interest towards exports.
Indian pellet export offers are currently hovering at USD 78-79/MT, FoB India for Sept’16 deliveries. Pellet export market is on a higher node due to better realization which had opened up more opportunities for Indian pellet exporters.
East India based pellet makers are focusing entirely on exports. They are not found offering pellet in the domestic market, rather focusing more on exports.
Trade-wise:
- JSPL & Arya Iron and Steel, are not seen giving offers in the domestic market, focusing entirely on exports. Also, Rashmi Metaliks is focusing on its export shipment over which it is also not making offers in the domestic market.
- Rourkela-based pellet maker –Shri Mahavir Ferro Alloys is not seen giving offers in the domestic market. Its pellet export offers are at USD 79/MT, FoB India.
- Essar Steel has concluded its third pellet export deal to China. The last shipment was made on 09 Aug’16 for around 52,000 MT pellets at USD 76.5/MT, FoB India.
Indian pellet becomes competitive over increase pellet premium
Pellet premium has crossed the level of USD 30/MT last week. Strong demand for pellets has also moved premium further up. Due to ongoing environmental inspection in various provinces in China and restriction on using sinter as a feed material, pellets demand is increasing in China.
Chinese steel mills are forced to rely on premium-grade materials such as lumps and pellets to meet environmental standards.
Increased pellet premium have made Indian pellets competitive in the global market and have attracted Indian pellet manufacturers to look for more export deals.
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