In Week 43, spot pellet premium for BF grade Fe 65% pellets was assessed at USD 31.3/MT, up by USD 0.8/MT as compared to Week 42 at USD 30.5/MT.
Currently, prices for premium hard coking coal is hovering in the range of USD 251-252/MT, FoB Australia, recorded highest ever. Surging coking coal prices have compelled mills to look for other alternatives like pellets to reduce coking coal usage.
Chinese mills are trying to maximize the blast furnace efficiency by using the high-grade material in order to reduce usage of coking coal and coke.
Demand for pellets in China has picked up, supply remains still tight as Samarco’s operation is yet to start. Samarco, which used to produce 30 MnT pellets per year blast furnace feed is being idled at least till the end of 2017, sources expected.
It is to be noted that pellet premium has witnessed a similar gain in the past years like 2005, 2008 and 2011 when coking coal prices surged.
Pellet inventories at major Chinese ports decreased by 7.4% W-o-W. Inventories were recorded at 2.5 MnT in Week 43 against 2.7 MnT in Week 42.
Spot lump premium remained unchanged
In week 43, spot lump premium is assessed at USD 0.155/DMT. Spot lump premium remained unchanged as compared to Week 42 due to limited trade activities in iron ore lumps.
Seaborne lump inventories at Chinese major ports were recorded at 13.40 MnT in Week 43, up by 3% as it was 13.00 MnT in Week 42.
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