- East coast pellet export market subdued
- Plants focusing on domestic pellet deals
The Indian pellet export market remained subdued over the past week, with no trades reported from the east coast. Market activities in the Indian seaborne sector slowed down, while domestic demand remained strong, encouraging sellers to transact with local steelmakers.
BigMint’s India pellet (Fe 63%, 3% Al) export index (FOB east coast) remained stable w-o-w at $105/t on 12 February 2025. No pellet export deals were recorded from the eastern coast post-Chinese Lunar holidays. An unconfirmed export deal of 50,000 tonnes was reported at $114/t CFR China last weekend, but sellers have yet to confirm the deal.
The lower alumina material export tender received a decent response in the last one week as both tenders fetched active inquiries from buyers.
An Indian pellet-maker concluded an export deal for around 50,000 t of pellets (Fe 63%, 2% AL2O3) at $110-112/t FOB India recently, sources informed BigMint. Last week, sellers concluded a 50,000-t pellet export deal at $110/t FOB.
The gap between export and domestic realisations remained stable w-o-w and domestic prices exceeded export offers by INR 750/t ($9/t). Pellet (Fe63%) prices in Odisha’s Barbil were recorded w-o-w 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.
A pellet producer informed, “We are actively offering in the domestic market, where demand and margins are favourable. Export inquiries have slowed post-holidays, keeping overseas deals limited.”
Another seller, highlighting supply challenges, commented: “Higher-grade fines are in short supply at plants located on the east coast, limiting our ability to finalise pellet export deals. We are currently loading shipments before the holidays and awaiting the upcoming OMC auction to procure fines.”
Demand for pellets in the export market is stagnant despite a rise in global prices of iron ore fines. Only a few buyers are actively seeking low-alumina materials through export tenders. East Coast sellers are firmly quoting prices between $117-118/t CFR China, while buyers’ bids are decisively falling short of these levels.
The pellet trade is expected to pick up if the Chinese market remains supportive, particularly amid concerns over the US imposing a 25% import duty on steel and aluminium.
Rationale
- No confirmed deal was recorded this week from the east coast for T1 trade. Thus, this category was taken into consideration for today’s price calculations and accorded 0% weightage in the index calculation. Click here for detailed methodology.
- Eleven (11) indicative prices were received, and nine (9) were considered for calculation of the index and given 100% weightage.
Factors impacting pellet exports
- Chinese iron ore fines prices rise w-o-w: The benchmark iron ore fines index rose $2/t w-o-w to $107/t CFR China on 11 February. Market sentiment remained firm amid supply concerns, with unconfirmed reports of potential disruptions from Rio Tinto due to forecasted cyclones.
- DCE iron ore futures up: Iron ore futures on the Dalian Commodity Exchange (DCE) for the May 2025 contract climbed by RMB 27.5/t ($4/t) w-o-w to RMB 828.5/t ($113/t) on 12 February. On a d-o-d basis, futures rose by RMB 16.5/t ($2/t) as yesterday closed at RMB 812/t ($111/t).
Outlook
According to BigMint, pellet export prices are expected to remain volatile in the near term amid uncertainty on seaborne prices. However, some trades from the eastern region may be seen in the coming days.
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