- Seaborne iron ore offers kept prices supported
- Improved domestic demand boosts sellers’ confidence
BigMint’s India pellet (Fe 63%, 3-3.5% Al₂O₃) export index increased by $0.5/t w-o-w to $99/t FOB east coast on 19 August 2026, supported by firm global iron ore fines prices. The Fe 61% iron ore fines benchmark remained steady during the assessment period, providing support to pellet pricing and volatile sentiment across the seaborne market.
Despite the recent recovery in the index, export activity remained subdued as weak netbacks and limited margins continued to weigh on fresh bookings. Several pellet producers remained cautious, preferring to wait for better realisations, while others focused on domestic sales and captive consumption.
Chinese buying interest stayed limited and selective across grades. Meanwhile, Indian exporters largely held back from offering fresh cargoes, supported by comparatively better realisations in the domestic market.
Meanwhile, pellet inventories across 34 major Chinese ports remained largely stable w-o-w at 5.84 mnt, indicating slowdown from procuring fresh material aggressively.
Rationale
- Zero (0) confirmed deals from India’s east coast were 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.
- Eight (8) bids, offers, and indicative prices were heard, of which seven (7) were considered for the calculation of the index and given the balance 100% weightage.
Market updates
Export trading activity remained muted this week, as global iron ore benchmark fines prices continued to remain on a comparative softer tone, although the overall market remained relatively firm. The key constraint for Indian pellet exporters continues to be weak export economics, with domestic realizations currently offering an estimated INR 850-900/t premium over export returns.
The disparity has prompted several pellet producers to prioritize the domestic market over fresh export business. Domestic pellet prices have increased by around INR 200-300/t across most major regions this week, further improving the attractiveness of domestic sales. As a result, producers have limited incentive to chase export orders at current international price levels.
Meanwhile, most producers are already carrying pre-booked inventory earmarked for both export and domestic customers. Sellers are currently focused on executing these previously contracted orders and dispatching committed volumes rather than actively seeking fresh export business. This has further reduced spot availability and seller participation in the export market.
An international trader commented that “bids and offers are currently not aligning,” with buyers unwilling to improve bids while sellers remain reluctant to reduce offers given the prevailing domestic realizations. The persistent bid-offer gap continues to restrict fresh export business, keeping overall trading activity thin.
Market participants indicated that workable export levels are currently around $118-120/t CFR, translating to approximately $104-107/t FOB, depending on freight and material quality. At these levels, however, export economics remain largely unattractive compared with domestic alternatives.
The weakness in export economics is affecting both iron ore fines and pellet exports, although the underlying export indices have remained relatively stable due to firmness in the benchmark iron ore market. With domestic prices strengthening, limited fresh seller participation, and buyers maintaining conservative bids, near-term export activity is expected to remain subdued unless international prices improve sufficiently to narrow the domestic-export realization gap.
Domestic vs export market
The pellet export realisation was recorded for Fe 63% at INR 7,300/t ($76-77/t), gaining up by INR 50/t this week while domestic realisation (Fe 62.5%) rose w-o-w at INR 8,150/t ($87/t) exw. The gap remained largely unviable from a seller’s perspective.
Factors impacting pellet exports:
Chinese iron ore fines prices remain supported w-o-w: The benchmark iron ore fines Fe 61% index remained rangebound w-o-w at $96/dmt CFR China on 18 August. The steadiness in prices, however, did not translate into stronger spot buying. Most mills have already covered their immediate requirements, reducing the need for additional purchases in the near term. As per reports, buyers were reluctant to chase higher prices and were instead waiting for a clearer price direction.
DCE iron ore futures firms w-o-w: Iron ore futures on the Dalian Commodity Exchange (DCE) for the October 2026 contract settled at RMB 728.5/t on 19 August, indicating slightly firmer near-term sentiment.
Outlook
Export activity is expected to remain subdued from east coast and central-India, with producers favouring domestic sales amid better realizations. Most sellers remain occupied with executing existing commitments, keeping their participation in the spot export market limited.
Leave a Reply