- Wide bid-offer gaps keep east coast-based sellers cautious
- Chinese steel output cut news boosts market sentiment
Indian pellet export prices recorded support this week, driven by recent steel production cuts in China. However, trading activity remained subdued, as bid-offer mismatches persisted, keeping sellers on the east coast cautious. With buyers unwilling to raise their bids, very few deals were closed.
BigMint’s India pellet (Fe 63%, 3% Al) export index (FOB east coast) remained stable w-o-w at $96/t on 26 March 2025 against the previous assessment on 19 March. No trades were recorded this week from the east coast.
Notably, the recent announcement of a 10% cut in steel production from certain mills improved the overall market sentiment. This led some sources to expect additional production cuts and a recovery in the downstream steel market, which is struggling with overcapacity and weak margins. Meanwhile, other market participants noted that the outlook remains positive as hot metal production continues to trend upward.
Chinese mills continued to prioritize mid-grade iron ore fines over pellets for procurement, which further weighed on Indian pellet exports. Additionally, buyers showed a preference for low-alumina pellet material, leaving east coast-based pellet producers struggling to secure orders.
Recently, an Indian pellet exporter floated a 50,000 t tender (Fe 60%, 2.5-3% Al2O3, and 9.5% SiO2), which received bids from some buyers and was concluded at $90/t FOB.
Market sources had mixed opinions regarding export deals concluded last week. While some sources suggested limited transactions, major sellers denied any trading activity. A trader commented, “There is talk of deals being finalized, but no confirmation was received from primary suppliers, reflecting sluggish buying interest.”
In contrast, the domestic market showed resilience, with some bulk transactions reported in Odisha. A market participant informed BigMint, “Domestic demand provided some support to pellet prices, but export interest was minimal.”
Domestic prices exceeded export offers by INR 1,700/t ($20/t), remaining largely stable w-o-w. Pellet (Fe63%) prices in Odisha’s Barbil were recorded at INR 8,150/t ($95/t) exw, firm w-o-w. Meanwhile, ex-plant realisation in exports from Barbil stood at INR 6,450/t ($75/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.
- Eleven (11) indicative prices were received, and six (6) were considered for calculation of the index and given 100% weightage.
Factors impacting pellet exports
- Chinese iron ore fines prices down w-o-w: The benchmark iron ore fines index inched down by $1/t w-o-w to $103/t CFR China on 25 March. Prices dropped amid cautious trading, with the market keeping an eye on the news about production cuts. Steel mills were also wary, analyzing the impact of the production cuts on prices. Prices dropped at Chinese ports, though some medium-grade fines were procured.
- DCE iron ore futures rise w-o-w: Iron ore futures on the Dalian Commodity Exchange (DCE) for the May 2025 contract increased w-o-w by RMB 20 ($3/t) to RMB 780/t ($108/t) on 26 March. On a d-o-d basis, futures remained largely stable.
Outlook
As per BigMint’s analysis, with the financial year drawing to a close, the market is expected to remain largely stable, barring any major developments. However, fresh deals may surface in the coming fiscal year, shaping the market outlook.
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