India: Pellet export shipments stable m-o-m in Feb’22 on active Chinese buying

India’s pellet export shipments remained stable at 1.24 million tonnes (mnt) in Feb’22 when compared to the previous month, SteelMint’s vessel line-up data shows.

China, the sole importer

China was the largest and only pellet importer from India at 1.24 mn t in Feb’22. Export volumes to China witnessed a significant increase of 18% on month as against 1.05 mnt in Jan’22.

Shipper wise exporters in Feb’22

AM/NS India was the largest pellet exporter in Feb’22 at 0.54 mnt, up when compared to 0.16 mnt in Jan’22. AM/NS India commissioned its second 6 mn t/year pellet plant at the port city of Paradip in Odisha in Sept’21, sources informed. With the commissioning of the plant, the steelmaker’s total pellet capacity at Paradip now stands at 12 mn t/year and the company’s combined pellet production capacity has reached a phenomenal 20 mn t/year.

BRPL stood as the second-largest exporter at 0.23 mnt followed by Southern India-based KIOCL with 0.16 mnt.

Why pellet exports remained supported?

• Active Chinese buying: China actively imported pellet especially after the Chinese New Year (CNY) holidays amidst production curbs during the Winter Olympics.
• Higher export prices: Healthy volumes of pellet were exported by pellet producers as price realization in the export market remained firm. SteelMint’s assessment of India’s pellet exports (6-20mm, Fe 64%) prices rose sharply to $168/t FOB in mid-Feb’22 from $146/t FOB levels in mid-Jan’22.

Outlook

However, Indian producers are seeing a sudden spurt in enquiries for prompt pellet cargoes. Most of the enquiries are emerging from European buyers and they are mainly eying March shipments. The world’s third-largest pellet producer and exporter, Ferrexpo, has issued a force majeure notice to certain customers that were due to receive products via ocean-going vessels in the near term.

Both Russia and Ukraine supplied a substantial volume of pellets to the European Union (EU). In fact, data maintained with SteelMint reveals that both nations combined had more than a 29-mnt exports exposure. Ukraine supplied a substantial 16.03 mnt of pellets and concentrate in 2021, up nearly 4% against 15.44 mnt in 2020. Higher price realizations in non-Chinese destinations are likely to boost exports from India in near term.