- Pellets with lower alumina content fetch premium
- Domestic realisations remain higher by INR 700/t
Indian pellet export offers were range-bound w-o-w amid moderate trading activity. Market participants indicated that buying interest was stable, though limited transactions were made from India’s east coast.
BigMint’s India pellet (Fe 63%, 3% Al) export index (FOB east coast) remained stable w-o-w at $105/tonne (t) on 19 February 2025. An eastern India-based exporter sold 75,000 t (Fe62%) at $115.5/t CFR China, while another supplier sold 55,000 t (Fe63%) at $117/t CFR China towards the end of last week.
An east coast-based seller noted, “Prices hovered within a limited range throughout the week, with decent inquiries from buyers. However, no fresh deals were concluded from the east coast this week, as transactions had already been finalised last weekend.”
This week, an export tender for pellets with lower alumina content witnessed a positive response, with bids being made at a decent premium. Suppliers also received several bids for premium lower alumina material. An Indian pellet maker concluded an export deal for around 50,000 t (Fe 63%, 2% AL2O3) at $108/t FOB India recently, sources informed BigMint.
The gap between export and domestic realisations remained stable w-o-w. Domestic prices exceeded export offers by INR 700/t ($9/t). Pellet (Fe63%) prices in Odisha’s Barbil were recorded at INR 7,950/t ($91/t) exw. Meanwhile, ex-plant realisation in exports from Barbil stood at INR 7,250/t ($83/t) exw.
Moreover, traders and producers are closely monitoring today’s iron ore auction from the Odisha Mining Corporation (OMC) for its impact on pellet production costs.
A trader informed, “The market is waiting for the OMC auction results, which could influence higher-grade fines procurement and, in turn, production costs for pellets.”
In China, steel mills are ramping up production, particularly for discounted material, while pellet import prices have remained largely stable. Domestically, the Indian pellet market remains strong, with active deals reported. Some producers have preferred to focus on domestic sales instead of offering cargo for export.
Rationale
- One (1) confirmed deal was recorded in this publishing window from India’s east coast for T1 trade. Thus, this category was taken into consideration for today’s price calculations and accorded 50% weightage in the index calculation. Click here for detailed methodology.
- Eleven (11) indicative prices were received, and eight (8) were considered for calculation of the index and given 50% weightage.
Factors impacting pellet exports
- Chinese iron ore fines prices stable w-o-w: The benchmark iron ore fines index inched up by $1/t w-o-w to $108/t CFR China on 18 February. Prices remained largely firm, as seaborne trading and steel production gained momentum. Improved weather in Australia enabled sellers to resume operations. Steel mills ramped up output this week, boosting the production of discounted products. Portside prices were stable, and landing margins improved, but mills still preferred medium-grade fines with higher discounts.
- DCE iron ore futures edge down: Iron ore futures on the Dalian Commodity Exchange (DCE) for the May 2025 contract inched down by RMB 8/t ($1/t) w-o-w to RMB 820.5/t ($112/t) on 19 February. On a d-o-d basis, futures prices remained firm.
Outlook
According to BigMint, the pellet export market may fluctuate depending on the OMC auction results and volatility in seaborne prices.
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