Reduced pellet supply from India since Apr’17 and stricter environmental concerns have resulted in increased inquiries of Indian pellets from Chinese steel mills.
According to customs data maintained with SteelMint, India exported 0.49 MnT pellets in Apr’17 compared to 0.75 MnT in Mar’17. Amid sharp decline in Chinese spot iron ore prices, Indian pellet exporters focussed more on domestic sales than going for exports.
Stricter environmental concern checks against sintering activities in northern China for the “One Belt One Road” conference in Beijing forced steel mills to use pellets. This gave a short term push to the spot pellet premium.
Spot pellet premium for Fe 65% grade pellets increased by USD 4/DMT to USD 19.75/DMT, CFR China.
Indian pellet makers reported increase in inquiries for exports in last one week. Presently Indian pellet export offers to China are around USD 80/MT, CFR China. Also the vessel freight rates have softened amid quiet market. Last week an Indian pellet (Fe 64%) maker concluded a deal at USD 81.5/MT, CFR China for Jun’17 end delivery.
Domestic pellet prices remain under pressure over limited trades – Downward drift in P-DRI prices, coupled with limited pellet trades continues to weigh domestic pellet prices. Trade sources anticipate prices to remain at similar levels unless semi-finished steel prices witness improvement.
Indian Pellet Prices as on 16 May’17
|
City |
Grade (Fe %) | Basic Prices in INR/MT |
W-o-W |
| Barbil* | 63 | 4,000 | -100 |
| Keonjhar* | 63 | 3,900 | 0 |
| Jamshedpur | 63 | 4,200 | 0 |
| Jharsuguda | 63 | 4,500 | -400 |
| Durgapur | 63 | 4,400-4,500 | 0 |
| Raipur | 63 | 4,600-4,700 | 0 |
| Bellary | 63 | 5,900-6,000 | -200 |
| Kandla** | 63 | 5,400 | 0 |
| FoB India | 64 | 70-71 (USD/MT) | 0 |
| CNF China | 64 | 80 (USD/MT) | 0 |
*loaded to wagons
**delivered
Source: SteelMint Research
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