Pellet exports from India have climbed to 3 years high in the recent auction conducted today. An Odisha (east India) based pellet maker conducted an online auction for pellet exports today for about 50,000 MT quantity for mid Sept’17 shipment.
According to market sources report to SteelMint, the highest bids received was at around USD 111-112/MT, CFR China. This has taken Indian pellet export offers to hit 3-years high as these levels were last seen in Aug’14. Company’s previous auction conducted last week was closed at USD 107/MT, CFR China.
Spot pellet premium is assessed around USD 31.5/DMT, CFR China.
A trader was also heard to have sold a pellet cargo to be shipped in 1st week of October at USD 109/MT, CFR China.
Another pellet manufacturer based in eastern India was heard to have concluded a pellet export tender for 52,000 MT at around USD 108/MT, CFR China for October shipment.
Robust demand for high grade material has lifted prices further. Chinese steel mills are preferring usage of high grade material to lessen the increase in cost of coking coal. Coking coal prices have climbed by 12% M-o-M and is assessed at USD 195/MT, FoB Australia for Premium HCC. Apart from this, strict environmental restrictions imposed by Chinese government have forced steel mills to focus on purchase of high grade material.
Rising iron ore futures have been also pushing up pellet export offers.
Also iron ore port inventories have witnessed drop in past couple of weeks leading to increased demand of high grade ore at ports. Iron ore & pellet inventory at Chinese major ports declined to 137 MnT towards the end of last week against 139.15 MnT a week previous. Pellet inventory at ports have come down from 1.6 MnT to 1.5 MnT in the similar time frame.
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