- Weak buying activity witnessed this week
- Global iron ore prices dip w-o-w
India’s pellet export market remained largely silent this week as weak market sentiments and subdued deal activity kept participants cautious. Despite inquiries from overseas buyers, higher domestic prices and strong demand continued to draw suppliers toward the domestic market instead of exports.
The lack of substantial spot deals highlighted cautious sentiment among overseas buyers, many of whom are closely tracking price movements before committing to fresh bookings.
Price update
BigMint’s India pellet (Fe 63%, 3-3.5% Al) export index (FOB east coast) fell by $1/t w-o-w to $97/t on 20 August 2025 against 13 August.
Market comments
Market sources noted that the widening gap between domestic and export price realisations remains a key barrier. “Domestic pellet prices are significantly higher compared to what the export market is offering. For suppliers, it makes more sense to cater to local buyers who are paying better margins,” a major pellet producer said.
Adding to the challenges, production costs remain elevated due to ongoing raw material shortages, particularly in iron ore. This has further squeezed margins for exporters, leaving little room to conclude profitable overseas deals.
“Export realisations are simply not aligning with the current cost structure. With ore availability tight and costs rising, exporters cannot match the low bids from international buyers,” a trader highlighted.
Export inquiries have also slowed, with buyers in key markets preferring to wait for prices to align. Sellers, however, are holding firm at their offers, creating a standoff between buyers’ bids and suppliers’ asking prices. “We are seeing very limited traction in exports as neither side is willing to compromise. Sellers are sticking to high offers, while buyers are quoting lower bids,” an exporter commented.
With domestic demand expected to stay strong in the near term, market participants believe that exports will likely remain subdued unless global prices improve or raw material costs ease.
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.
- Thirteen (13) indicative prices were received, and eleven (11) were considered for the calculation of the index and given 100% weightage.
Factors impacting pellet exports
Chinese iron ore fines prices fall w-o-w: The benchmark iron ore fines index fell $3/t w-o-w to $101/t CFR China on 19 August. Prices dipped amid steady port-stock levels, with trading activity gradually picking up and medium-grade fines drawing buyer interest. Lump also saw better liquidity at northern ports ahead of sintering cuts. Rising inventories further deepened the backwardation trend at ports, while non-mainstream fines continued to offer cost-effective options for buyers.
Outlook
According to BigMint’s analysis, pellet export prices from India are expected to remain largely rangebound in the near term, as strong domestic demand continues to support firm offers, while weak buying interest from overseas markets limits the scope for price gains.
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