- Wide bid-offer disparity halts deal momentum
- Other regions offer cheaper low-alumina pellets
Indian pellet export prices remained under pressure this week as limited transactions and weak demand from Chinese buyers weighed on market sentiment. While some buying inquiries surfaced, sellers stayed on the sidelines, citing unworkable prices. In tandem, BigMint’s India pellet export index dipped $2/tonne (t) w-o-w.
Only lower alumina cargoes witnessed some traction, primarily due to their compatibility with Chinese mills’ requirements and competitive pricing. However, higher-alumina material from the Indian east coast continued to face tepid interest, with no firm deals heard.
Price update
BigMint’s India pellet (Fe 63%, 3-3.5% Al) export index (FOB east coast) decreased by $1.5/t w-o-w to $90/t on 11 June 2025 against 4 June. No deals were recorded from the east coast in this publishing window.
Last week, an Indian pellet-maker concluded a deal for 50,000 t (Fe63%, 2.5% alumina) via an export tender. According to sources, the deal was closed at around $96-97/t FOB India. Meanwhile, at today’s export tender, 50,000 t pellet tender received bid of $96/t FOB India; however, it has to be confirmed with the transected parties.
Market commentary
A market participant observed, “There is interest from Chinese buyers, but their bids are far too low. Sellers are not willing to entertain such discounts, especially when domestic realisations are also falling.”
Another exporter stated, “Chinese buyers are sourcing low-alumina pellets from other regions at cheaper prices. That is dampening the competitiveness of Indian east coast cargoes. There is very little room to negotiate when the price gap is this wide.”
Market participants believe that unless there is a significant narrowing of the bid-offer spread, deals will remain elusive. A supplier commented, “The disparity between what buyers are offering and what sellers are expecting is just too large right now.”
Domestic vs export market
Domestically, prices dipped too, compounding the cautious sentiment among exporters. Most adopted a wait-and-watch approach, hoping for either a recovery in domestic rates or a shift in Chinese buying appetite.
Domestic prices exceeded export offers by around INR 1,700/t ($20/t), largely stable 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 ($90/t) exw, inched down by INR 100/t ($1/t) w-o-w. Meanwhile, the ex-plant realisation in exports from Barbil stood at INR 5,850/t ($69/t) exw, down by INR 100/t ($1/t) w-o-w.
The domestic market continued to offer better realisations compared to exports, even after a drop in prices. Some sellers intend to conclude domestic pellet tenders in the near term to overcome the export market pressure.
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.
- Eleven (11) indicative prices were received, and five (5) 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 benchmark iron ore fines index was range-bound w-o-w at $95/t CFR China. Trading was healthy, with end-July cargoes showing a flatter price trend against near-term shipments amid comfortable supply and soft demand. Mill inventories were low, and procurement focused on portside stocks.
DCE iron ore futures stable w-o-w: Iron ore futures on the Dalian Commodity Exchange (DCE) for the May 2025 contract remained largely stable w-o-w at RMB 707/t ($98/t). Meanwhile, prices recovered by RMB 8.5/t ($1/t) d-o-d today.
Outlook
As per BigMint’s analysis, Indian pellet export prices are expected to remain subdued in the near term, with no major deals on the horizon.
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