- Iron ore fines index, DCE futures up $2-4/t w-o-w
- Sellers yet to get firm bids, trade remains muted
Indian pellet export prices edged up w-o-w, buoyed by positive macroeconomic sentiments in the seaborne market and a surge in global iron ore tags. However, trading activity was subdued, as sellers exercised caution, awaiting concrete inquiries from buyers.
BigMint’s India pellet (Fe 63%, 3% Al) export index (FOB east coast) increased by $2/tonne (t) w-o-w to $96/t on 14 May 2025 against the previous assessment on 7 May. Deals for around 120,000 t were concluded in this publishing window by a prominent Indian exporter. However, deals are yet to be confirmed by the contracted parties.
Market participants attributed the price rise to a combination of factors, including the recent US-China trade truce, which temporarily eased global trade tensions. This agreement led to a 90-day pause on most tariffs imposed since April. The US agreed to reduce tariffs on Chinese goods from 145% to 30%, while China cut its tariffs from 125% to 10%.
Seaborne prices were not viable for Indian exporters, given higher production costs amid rising iron ore tags in the domestic market. Additionally, domestic prices remained attractive, further dampening export momentum.
Domestic prices exceeded export offers by INR 1,500/t ($18/t), narrowing slightly by INR 300/t ($4/t) compared to last week, as domestic tags witnessed a drop w-o-w. Pellet (Fe63%) prices in Odisha’s Barbil were recorded at INR 7,850/t ($92/t) exw, down w-o-w. Meanwhile, ex-plant realisation in exports from Barbil stood at INR 6,300/t ($74/t) exw.
Exporters remained cautious, with limited inquiries from overseas buyers. However, many were upbeat about increased trade momentum in the near term. An exporter stated, “Global cues are positive, but the domestic market offers better margins at present. However, we remain optimistic that deals may materialise in the coming days, as prices are expected to rise further.”
Given better margins in the domestic market, producers also limited their export allocations.
A trader noted, “The domestic market is currently more attractive in terms of realisation. Indian exporters now await stronger buying interest to convert positive sentiment into actual shipments. Trades are likely to be concluded in the near term following an improvement in market dynamics.”
Thus, exporters closely monitored global trade developments, with the expectation of increased deals.
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.
- Twelve (12) indicative prices were received, and Seven (7) were considered for the calculation of the index and given 100% weightage.
Factors impacting pellet exports
Chinese iron ore fines prices rise w-o-w: The benchmark iron ore fines index increased by $2/t w-o-w to $101/t CFR China on 13 May. Prices increased amid healthier market sentiment following easing trade tensions between China and the US. The market saw increased fresh trading activity after the announcement. Additionally, mills’ outputs rose marginally, supported by strong raw material demand, healthy margins, and fresh steel trades.
DCE iron ore futures up w-o-w: Iron ore futures on the Dalian Commodity Exchange (DCE) for the May 2025 contract rose by RMB 29/t ($4/t) w-o-w to RMB 737/t ($102/t) on 14 May. On a d-o-d basis, prices inched up RMB 8.5/t ($1/t).
Pellet inventory at Chinese ports inched up by 0.15 million tonnes (mnt) w-o-w to 5.2 mnt on 8 May, as per data published by Steelhome.
Outlook
As per BigMint’s analysis, the pellet export market will become clearer in the near term, and deals may be closed by Indian sellers.
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