- Stronger domestic realisations continue to limit export deals
- Indian exporters currently seeking $120-122/t CFR China
BigMint’s India pellet export index rose by $1.5/t w-o-w to $104.5/t FOB East Coast on 9 September 2026, supported by firmer global iron ore fines prices. The Fe 61% iron ore fines benchmark maintained its upward momentum during the week, aided by improved buying activity at Chinese ports and mixed procurement across different grades.
The price increase was further supported by supply-side constraints, prompting buyers to advance procurement amid concerns over material availability. However, the recovery in the export index has yet to translate into stronger pellet export activity, as export netbacks and realisations for Indian producers remained relatively weak. Chinese buying interest continued to be selective, keeping fresh export bookings limited.
Pellet inventories across 34 major Chinese ports stood at 5.82 mnt, marginally lower than 5.84 mnt a week earlier. The slight drawdown suggests some improvement in procurement, although inventory levels remain sufficient to limit aggressive near-term buying.
Rationale
- Zero (0) confirmed deals from India’s east coast were recorded in this publishing window for T1 trade, and, therefore, this category was allotted 0% weightage for today’s price calculations. Click here for the detailed methodology.
- Ten (10) bids, offers, and indicative prices were heard, of which all were considered for the calculation of the index and given the balance 100% weightage.
Market updates
Pellet export trading activity remained largely subdued during the week, with sellers, particularly on the eastern coast, showing limited interest in offering fresh cargoes. An eastern coast seller noted that export realisations remain unattractive, especially as Fe 61% iron ore fines prices have yet to recover above $102-103/t. Sellers are currently seeking CFR levels of around $120-122/t to improve export viability.
Some sellers were heard offering at similar levels, although domestic sales continue to provide significantly better returns. A market participant estimated that domestic realisations are currently around INR 1,500-1,800/t higher than export realisations, making the domestic market a more lucrative option and limiting sellers’ willingness to commit cargoes for export.
On the western coast, some tenders for high-grade pellets were heard to have opened during the week. However, these were subsequently called off, further limiting spot availability.
Higher freight costs are also emerging as an additional constraint on export economics. Some buyers indicated that freight rates have increased across several regions, partly due to elevated oil prices and ongoing geopolitical tensions. Rising bunker and insurance costs are adding to delivered costs, making buyers increasingly resistant to higher CFR levels.
Meanwhile, Chinese buying interest in pellets remained selective. An international trader said Chinese buyers were relatively less active in the pellet market, while pellet inventories at major Chinese ports remained broadly unchanged w-o-w. In contrast, demand for iron ore fines from China was relatively better, indicating a preference for fines over pellets amid current price levels.
However, another international trader informed BigMint with a more positive view, noting that recent negotiation issues between CMRG and a major Australian miner have introduced some uncertainty around future supply. Thus, the market expects Chinese mills to adopt a more proactive procurement approach for October-November cargoes, particularly for mid-grade Australian fines.
Domestic vs export market
Pellet export realisations for Fe 63% were recorded at INR 7,760/t ($81-82/t), gaining by INR 200/t this week, while domestic realisations (Fe 62.5%) shrank by INR 100/t w-o-w to INR 9,150/t ($96-97/t) exw. Thus, the gap narrowed slightly to INR 1,400/t making it better than last week, where the gap widened to INR 1,700/t.
Factors impacting pellet exports
Chinese iron ore fines prices inch up w-o-w: The benchmark iron ore fines Fe 61% index rose w-o-w by $1/dmt to $101/dmt CFR China on 09 September, hitting a 2-month high. The recovery was supported by stronger physical buying in China, expectations of higher freight costs and tighter seaborne availability from major exporters. Uncertainty over future cargoes from an Australian miner also kept market participants cautious and provided support to prices. Chinese physical market activity picked up significantly during the day, particularly at ports, where trading volumes increased sharply from the previous session.
DCE iron ore futures rise w-o-w: Iron ore futures on the Dalian Commodity Exchange (DCE) for the January 2027 contract settled at RMB 739.5/t on 9 September, indicating slightly firmer near-term sentiment for export trades.
Outlook
Higher offers and better realisations in the domestic market are making exporters unwilling to conclude deals. A sustained pickup in exports is likely to depend on international buyers accepting CFR levels above $120/t, which would help narrow the gap between export and domestic realisations.
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