- Pellet inventories across 34 key Chinese ports rise marginally
- Weak global iron ore prices weigh on pellet export prices
BigMint’s India pellet (Fe 63%, 3-3.5% Al₂O₃) export index declined by $4.5/t w-o-w to $96.5/t FOB east coast on 5 August 2026. The index has fallen to the lowest level since end-February, as per data maintained with BigMint. Export trading activity remained subdued during the assessment period, with no fresh deals concluded. Market participants largely adopted a wait-and-watch approach during the assessment period as persistent weakness in the global iron ore market kept sentiment subdued.
Buying interest from China remained limited and selective across pellet grades, while Indian exporters refrained from offering fresh cargoes amid better domestic realisations.
Meanwhile, pellet inventories across 34 major Chinese ports rose marginally by 0.03 mnt w-o-w to 5.9 mnt, indicating steady consumption despite comfortable overall iron ore availability.
Rationale
- Zero (0) confirmed deal from India’s east coast was recorded in this publishing window for T1 trade, and, therefore, this category was allotted 0% weightage for today’s price calculations. Click here for the detailed methodology.
- Nine (9) indicative prices were received, and five(5) were considered for the calculation of the index and given a balance 100% weightage.
Market updates
Export trading activity remained completely muted during the assessment period, with no fresh spot deals reported as prevailing market prices remained well below sellers’ workable levels. Most pellet producers were occupied with dispatching previously booked cargoes and showed little interest in offering fresh export volumes.
Market participants said the export market has moved too far away from commercially viable levels for producers. Current buyer indications were heard at around $110-112/t CFR China, while most sellers indicated that $114-116/t CFR China is the minimum workable range for fresh business. The wide gap left virtually no room for negotiations, keeping spot trading at a standstill.
An international trader said, “The market is simply not workable at current levels. Buyers are looking at $110-112/t CFR, but producers need at least $114-116/t CFR to make exports viable. Nobody is willing to compromise, so exporters are only loading cargoes booked earlier instead of offering fresh material.”
Weak sentiment in the seaborne iron ore market further weighed on buying interest, with Chinese buyers preferring to stay on the sidelines in anticipation of lower prices. As a result, sellers found little reason to chase export business at reduced realisations.
At the same time, improving domestic market conditions have shifted producers’ focus away from exports. Market participants noted that trading activity has picked up in the local market over the past few days, resulting in better domestic realisations and reducing the need to compete aggressively in overseas markets.
Another market participant said, “The domestic market is offering better returns now. Trading activity has improved, and producers are comfortably selling locally. With the monsoon progressing, demand for lumps has eased, while pellets continue to see relatively better demand, making the domestic market a more attractive option than exports.”
Participants expect export activity to remain subdued in the near term unless seaborne prices recover closer to sellers’ workable levels. Until then, most exporters are likely to continue dispatching previously contracted cargoes while keeping fresh export offers on hold.
Domestic vs export market
The pellet export realisation was recorded for Fe 63% at INR 6,950-7,000/t ($73-74/t), dropping by INR 450/t this week while domestic realisation (Fe 62.5%) gained w-o-w by INR 100/t ($1/t) to INR 8,050/t ($85/t) exw. Thus, the widening spread between domestic and export realisations has kept exporters on the sidelines.
Factors impacting pellet exports
Chinese iron ore fines prices fall by $4/t w-o-w: The benchmark iron ore fines Fe 61% index declined by $4/t w-o-w to $93/dmt CFR China on 4 August. Weak steel mill margins, cautious buying, and abundant cargo availability continued to weigh on sentiment. Seaborne prices have corrected more sharply than domestic port prices, potentially improving trading margins if the trend continues. Despite these developments, concerns persisted over the large availability of blended fines cargoes in the seaborne spot market, limiting the scope for any meaningful price recovery.
DCE iron ore futures weaken w-o-w: Iron ore futures on the Dalian Commodity Exchange (DCE) for the September 2026 contract settled at RMB 699.5/t ($104/t) on 5 Aug, down by RMB 39/t ($6/t) w-o-w.
Outlook
India’s pellet export market is expected to remain under pressure in the near term as weak Chinese buying interest and unfavourable export economics keep spot trading muted. Producers are likely to continue prioritising domestic sales unless seaborne prices recover.
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