- Elevated freights keep CFR prices supported
- Chinese demand subdued amid volatility
India’s pellet export market saw a marginal uptick this week, with prices rising slightly on a w-o-w basis. However, the overall market tone remained cautious, as no confirmed export deals were recorded.
Prices were largely supported by an uptick in global iron ore fines prices and ongoing export inquiries. At the same time, elevated freight rates and vessel unavailability continued to push CFR levels higher, impacting buyer participation.
Price and trades update
BigMint’s India pellet (Fe 63%, 3-3.5% Al) export index increased by around $1/t w-o-w to $101.5/t FOB east coast on 18 March against 11 March. No export deals were concluded from the east coast in this publishing window, with most cargoes still under negotiation.
Market sources indicated that discussions for cargoes are being heard at around $116.5/t CFR China, supported by elevated freight costs and tight vessel availability.
Market updates
Overall, trading activity remained slow, with most deals still under negotiation. Sellers maintained firm offers, while buyers stayed cautious, resulting in limited market movement.
An international trader said, “Freight rates have increased sharply and vessel availability is tight, which is pushing CFR levels higher despite limited deal closures.”
Market participants indicated that the recent uptick in global iron ore fines prices has supported pellet export pricing. However, the absence of confirmed trades suggests that the firmness is largely sentiment-driven rather than transaction-backed.
A trader noted, “Demand is still weak. Most of this is just paper pricing at the moment, with very few real deals happening.”
Buyers are increasingly cautious due to elevated seaborne freight costs, with some preferring portside material as it offers better cost efficiency. Discussions with market participants also suggest that a few Chinese mills are shifting toward domestic concentrate instead of imported lumps and pellets to manage margins. On the supply side, Indian pellet producers are largely focusing on domestic sales, where realizations remain relatively better compared to export parity levels.
Another exporter said, “The market is still uncertain with lukewarm demand, ongoing policy developments in China, and high freight levels are keeping buyers on the sidelines.”
Despite the current slowdown, participants expect some movement ahead. With the financial year nearing its close, hardly deals get concluded in the coming weeks, although price volatility is likely to persist.
Domestic vs export market
Domestic pellet prices remained steady over the week, while export realizations moved higher, leading to a narrowing of the domestic-export spread. Export realizations (Fe 63%) increased to INR 7,400/t on 18 March from INR 7,200/t on 11 March, reflecting a w-o-w rise of INR 200/t. In contrast, domestic realizations (Fe 62.5%) held firm at INR 8,750/t exw, showing no change over the same period.
As a result, the spread between domestic and export prices narrowed to INR 1,300/t, down from INR 1,500/t on 11 March, indicating a contraction of around INR 200/t w-o-w.
The reduced gap suggests improving export parity, although domestic markets continue to offer relatively better realizations for producers.
Rationale
- No confirmed deal from India’s east coast was recorded in this publishing window for T1 trade and was allotted 0% weightage for today’s price calculations. Click here for the detailed methodology.
- Nine (9) indicative prices were received, and eight (8) were considered for the calculation of the index and given a balance 100% weightage.
Factors impacting pellet exports
Chinese iron ore fines prices rise w-o-w: The benchmark iron ore fines Fe 61% index surged by $5/dmt w-o-w to $110/dmt CFR China on 17 March. Chinese steel futures rose d-o-d on better downstream demand and improved mill output outlook, supporting sentiment.
DCE iron ore futures price: Iron ore futures on the Dalian Commodity Exchange (DCE) for the May 2026 contract closed at RMB 811/t ($118/t) on 18 March, increased RMB 20/t d-o-d.
Outlook
The pellet export market is expected to remain firm but volatile in the near term. Demand remains subdued and the approaching financial yearend in India will keep the market muted.
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