- Seaborne market sees lack of deals from India
- Chinese mills shift interest to cheaper alternatives
The Indian pellet export market remained subdued this week, with no reported activity in the seaborne segment. Market participants indicated that Chinese buyers have shown little to no interest in Indian pellet cargoes, keeping demand at a standstill. Exporters have adopted a cautious stance, citing unviable price levels and an absence of inquiries from overseas markets.
Price update
BigMint’s India pellet (Fe 63%, 3-3.5% Al) export index (FOB east coast) inched down by $0.5/t w-o-w to $88.5/t on 25 June 2025 against 18 June. Notably, no pellet export deals were reported from India’s eastern coast in the recent week, highlighting the sluggishness in trade activity.
Market commentary
A pellet exporter, commenting on the current status of the weak market, said: “There is not even a single inquiry in the market currently, and the floating export offers are far from feasible for Indian exporters.” He further added, “I don’t think there will be any improvement in pellet export prices in the near future. We are not even quoting prices to buyers in this downtrending market.”
Amid falling global prices, Chinese buyers are opting for cheaper, low-alumina material from alternative sources, further reducing the competitiveness of Indian pellets. As a result, several major Indian exporters and pellet producers have already shifted their focus to the domestic market, where realisations are relatively better.
The exporters expect the pellet export market to remain inactive in the short term, especially from India’s east coast. With no deals in sight and continued global pressure, a further correction in prices cannot be ruled out.
Another exporter noted, “If there is a sharp increase in international pellet demand, exports are likely to remain on hold.”
The sentiment across the pellet export market remains bearish, with participants preparing for a continued lull in activity.
An Odisha supplier added: “The gap between the bids and offers in the sea-borne market is still approximately $10-15/t. We are not getting any counter from the buyers.”
Domestic vs export market
The domestic pellet market is currently facing issues with production costs due to higher ore prices in the current offers. However, there is a significant disparity between Indian domestic pellet prices and export offers.
Domestic prices exceeded export offers by around INR 1,900/t ($22/t), widening w-o-w amid the drop in export and domestic prices. Pellet (Fe63%) prices in Odisha’s Barbil were recorded at INR 7,550/t ($88/t) exw, and remained stable w-o-w. Meanwhile, the ex-plant realisation in exports from Barbil stood at INR 5,650/t ($67/t) exw.
Rationale
- No confirmed deals from India’s east coast were recorded in this publishing window for T1 trade. Thus, this category was not taken into consideration for today’s price calculations and accorded 0% weightage in the index calculation. Click here for the detailed methodology.
- Eight (8) indicative prices were received, and six (6) were considered for the calculation of the index and given 100% weightage.
Factors impacting pellet exports
Chinese iron ore fines prices stable w-o-w: The benchmarks iron ore fines index remained stable w-o-w at $93/t CFR China on 24 June. Recent trading activity has shifted towards medium-grade fines, leading to a decline in prices after a brief increase in the last one week. According to reports, market confidence in short-term demand has waned due to the low season and lack of supportive policies.
DCE iron ore futures up w-o-w: Iron ore futures on the Dalian Commodity Exchange (DCE) for the May 2025 contract inched up by RMB 7/t ($1/t) w-o-w to RMB 702.5/t ($97/t) on 25 June. Meanwhile, prices were largely stable d-o-d today.
Outlook
As per BigMint’s analysis, the pellet export market will remain subdued in the coming days, with deals likely remaining absent.
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