- Persistent bid-offer mismatch stalls trade
- Domestic market offers better realisation
India’s pellet export prices witnessed a marginal uptick w-o-w, supported by a hike in the broader market. However, export buying sentiment remained notably weak, with no deals concluded, due to a persistent mismatch between bids and offers.
Price update
BigMint’s India pellet (Fe 63%, 3-3.5% Al) export index (FOB east coast) rose by $2.5/t w-o-w to $91/t on 2 July 2025 against 25 June. Notably, no pellet export deals were reported from India’s eastern coast in the recent week, highlighting sluggishness in trade activity.
Market commentary
Market participants expressed that despite the nominal increase in export offers, the gap between buyers’ bids ($100/t) and sellers’ expectations ($112-115/t) remained wide, effectively stalling any export transactions. A participant observed, “There is no real scope for export deals at the moment. The bid-offer gap is just too large to conclude any deals.”
Amid this stagnant export scenario, several pellet producers shifted their focus back to the domestic market, where demand continues to be strong even during the ongoing monsoon season. A producer stated, “Domestic realisations are more favourable, and plants are operating steadily to meet local requirements.”
Meanwhile, Chinese buyers were largely absent from the market. The prevailing bids from China remained significantly below Indian suppliers’ offers, making trade unviable. An exporter informed BigMint, “Chinese buyers are showing little interest. Their bids are far lower than what Indian exporters are quoting.”
Additionally, concerns around production cuts in certain steel-producing provinces in China further dampened buying interest. With uncertainty looming over Chinese demand and the bid-offer gap unlikely to narrow soon, the Indian pellet export market is expected to remain subdued in the near term.
Meanwhile, strong domestic demand continues to offer support to Indian pellet producers, helping them navigate the lull in the export segment.
Domestic vs export market
Domestic prices exceeded export offers by around INR 1,700/t ($20/t), widening w-o-w amid higher export values and stable domestic tags. Pellet (Fe63%) prices in Odisha’s Barbil were recorded at INR 7,550/t ($88/t) exw, stable w-o-w. Meanwhile, the ex-plant realisation in exports from Barbil stood at INR 5,900/t ($70/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 seven (7) 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 remained stable w-o-w at $93/t CFR China on 1 July. Prices were pressured by reports of possible production curbs under tightened environmental norms. Lower sintering and pig iron output, along with production cuts in key hubs, weighed on sentiment. Moreover, subdued seaborne activity pointed to a prevailing bearish outlook.
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 20/t ($2.5/t) w-o-w to RMB 722.5/t ($100/t) on 2 July. Meanwhile, prices rose by RMB 14/t ($2/t) d-o-d today.
Outlook
As per BigMint’s analysis, the pellet export market will remain subdued in the coming days, as there is no expectation for deals to be concluded in the near term from the eastern coast of India.
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