- Global iron ore price gains lift pellet export offers
- Stronger domestic realisations continue to limit export deals
BigMint’s India pellet export index increased by around $3/t w-o-w to $104/t FOB East Coast on 2 September 2026, supported by firmer global iron ore fines prices. The Fe 61% iron ore fines benchmark gained healthy momentum during the week, supported by improved buying activity, particularly at Chinese ports, along with mixed procurement across various grades.
Despite the recovery in the export index, overall pellet export activity remained muted as export netbacks and actual realisations for Indian pellet producers remained relatively soft. Chinese buying interest also remained limited and selective, keeping fresh export bookings subdued.
Meanwhile, pellet inventories across 34 major Chinese ports edged up slightly w-o-w to 5.84 mnt, compared with 5.71 mnt previously, indicating a marginal increase in fresh procurement while potentially limiting the need for 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.
- Eight (8) bids, offers, and indicative prices were heard, of which seven (7) were considered for the calculation of the index and given the balance 100% weightage.
Market updates
Export trading activity remained subdued during the week. Some pellet export tenders were heard to be active in the market from the west-coast; however, certain tenders were declined or failed to materialise due to lower bids from buyers. Indian pellet producers continued to remain cautious on fresh export commitments as export netbacks and actual realisations remained relatively weak compared with the domestic market.
Indian pellet producers are currently finding better realisations in the domestic market, where market conditions remain favourable for sellers. The recent rise in sponge iron and billet prices across major markets in India has strengthened domestic pellet demand and pricing. Higher prices in the secondary and semi-finished steel segments, coupled with elevated coking coal costs, have further supported domestic pellet prices.
Several major domestic pellet markets recorded price increases of around INR 600-800/t over the past week. The sharp rise in domestic prices has further improved the attractiveness of local sales, prompting major pellet producers to increasingly prioritise the domestic market over exports. Consequently, only limited quantities are currently being offered for export, restricting spot availability from Indian sellers.
Market participants indicated that workable export levels are currently around $118-120/t CFR, translating to approximately $104-107/t FOB, depending on freight and material quality. At these levels, however, export economics remain largely unattractive compared with domestic alternatives. The disparity between domestic and export realisations has reduced sellers’ incentive to actively pursue fresh export business at prevailing international price levels.
The stronger domestic market has also resulted in limited participation from Indian pellet producers for export. Several major sellers are currently prioritising domestic dispatches, while some are focusing on fulfilling existing commitments. This has further reduced the availability of fresh cargoes and kept export trading activity muted.
An international trader indicated that bids and offers continued to remain apart during the week, with buyers reluctant to improve their bids while sellers remained unwilling to lower offers given the stronger domestic realisations. The persistent bid-offer gap has restricted fresh export transactions, despite improved sentiment in the global iron ore market.
From an export economics perspective, the recent increase in global iron ore fines prices has provided support to Indian pellet export prices and contributed to the rise in the export index. Firmer iron ore futures have also improved overall market sentiment.
Domestic vs export market
The pellet export realisation was recorded for Fe 63% at INR 7,550/t ($79-80/t), gaining up by INR 250/t this week while domestic realisation (Fe 62.5%) rose sharply w-o-w by INR 800/t to INR 9,250/t ($97-98/t) exw. Thus, the gap widened to INR 1,700/t making it less attractive deal from a seller’s perspective for export.
Factors impacting pellet exports:
Chinese iron ore fines prices remain supported w-o-w: The benchmark iron ore fines Fe 61% index remained rangebound w-o-w to $100/dmt CFR China on 01 September. Despite the recent upward movement, concerns over the strength of the underlying market persisted. Mills remained cautious about the durability of the rally, as steel demand has yet to show a convincing improvement. At the same time, rising input costs continued to erode mill profitability, limiting their ability to support further increases in iron ore prices.
DCE iron ore futures firms w-o-w: Iron ore futures on the Dalian Commodity Exchange (DCE) for the January 2027 contract settled at RMB 724.5/t on 2 September, indicating slightly firmer near-term sentiment.
Outlook
Export activity is expected to remain subdued from east coast and central-India, with producers favouring domestic sales amid better realizations. Most sellers remain occupied with executing existing commitments, keeping their participation in the spot export market limited.
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