An Eastern India based pellet maker has closed export deal for 50,000 MT high grade (Fe 64%) pellets to China.
The export realization was in the range of USD104-106/MT, CFR China. Considering vessel freight from India to China to be around USD 8-9/MT, then FoB price would come around USD 96-98/MT, FoB India.
Supplier expected prices at USD 107-110/MT, CFR: Bids received were lower than expected. Indian manufacturer sell material to China as it is only buyer and at times holding becomes expensive in volatile market.
Pellet Premium fall by USD 3.5/MT: It is to be noted that currently pellet premium for Fe 65% BF grade pellets in China have also moved down by USD 3.5/MT to USD 17/MT
China prefers sinter & fines over pellets: Market participant also share that Chinese buyers preference shifted to fines and sintering plant. Therefore premium and lumps prices are in downward trend.
Since, supply of Indian pellets is more in to China and Chinese Buyers are not giving much preference to Indian material.
Price index fall to USD 90/MT: In addition, global iron ore prices also dropped down by USD 5/MT to USD 90/MT in a day. Hence, the company’s supplier closed the deal in anticipation of further volatility.
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