India: Pellet export index remains stable, some deals likely to get concluded shortly

• Multiple export offers floated by producers
• Low-alumina pellets see steady overseas demand

BigMint’s India pellet (Fe 63%, 3-3.5% Al) export index remained stable w-o-w at $102.5/t FOB east coast on 27 May. Pellet export prices in the seaborne market remained largely stable this week amid active offers from Indian pellet producers, although buying interest from Chinese mills continued to remain subdued.

Sentiment turned cautious led by the bid-offer disparity in the seaborne market.

Prices and trade update

No confirmed deals for India-origin pellets (Fe 63%, 3-3.5% Al) were heard from the east coast during the current assessment window while multiple producers are trying to sell overseas.

A domestic producer concluded a deal for a low-alumina pellet (Fe 63%, 8% alumina and silica) cargo at around $110-111/t FOB through an export tender, reflecting steady overseas demand for premium-grade material.

Market participants said Indian producers are increasingly turning toward exports after a continuous decline in domestic pellet prices over the past few weeks.

Rationale

• Zero confirmed deal from India’s east coast was 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.
• Eleven (11) indicative prices were received, and ten (10) were considered for the calculation of the index and given a balance 100% weightage.

Market updates

An international trader said, “Domestic realizations have weakened sharply, forcing many pellet makers to actively explore export opportunities.”

According to exporters, regular-grade Indian pellet offers from east coast suppliers were heard at around $122-123/t CFR China, while workable market levels were assessed significantly lower at $117-118/t CFR China. The gap between seller expectations and buyer bids has so far restricted fresh deal activity from eastern India.

Another pellet producer said, “While export enquiries have improved recently, Chinese buyers continue to maintain cautious purchasing strategies. We are actively offering material in the overseas market now, but buyer counters are still low and negotiations are taking time.”

As per reports, Chinese mills are closely monitoring developments in the coking coal and coke markets. Recent supply concerns following the Liushenyu coal mine accident and a fourth round of coke price hikes have increased raw material costs for steelmakers. Higher coal and coke costs could narrow steel margins and reduce mills’ appetite for iron ore purchases.

Domestic vs export market

Gap between export and domestic realisations almost equal- Export realisations (Fe 63%) were recorded at INR 7,650/t ($80/t) on 27 May, a drop of INR 50/t ($0.5/t) w-o-w amid a wider spread between INR and USD. Domestic realisations (Fe 62.5%) too fall by INR 150/t ($1/t) w-o-w to INR 7,750/t ($81/t) exw.

Factors impacting pellet exports

Chinese iron ore fines prices decline w-o-w: The benchmark iron ore fines Fe 61% index fell by $3/t w-o-w to $105/dmt CFR China on 19 May. Prices dropped as additional cargoes of low-grade Australian fines entered the Chinese portside market, weighing on sentiment despite expectations of firm steel production in China. Inventories of low-grade iron ore remained elevated, with abundant Indian fines cargoes and unsold Australian low-grade materials continuing to pressure the market.

DCE iron ore futures prices edge down w-o-w: Iron ore futures on the Dalian Commodity Exchange (DCE) for the September 2026 contract closed at RMB 781.5/t ($115/t) on 27 May, down RMB 18.5/t ($2.5/t) w-o-w.

Vessel freights surge w-o-w: Iron ore freights rose slightly w-o-w by $1/dmt to $16/dmt on 26 May. From India to China, overall vessel availability remained tight, though fixtures were healthy.

Outlook