Indian pellet export index falls marginally on lower bids

SteelMint’s weekly pellet export index (FOB east coast India) has dropped to $194/t after hitting all-time high levels of $196/t. The index has come down by $2/t w-o-w.

The drop in the index is attributed to lower bids from Chinese end-users ahead  of approaching holidays and falling global iron ore prices. Chinese lunar new year holidays, and approaching Chinese spring festival have kept buying inquiries on the lower side. Numerous mills in China have already finished up with restocking of material ahead of holidays, sources have reported to SteelMint. Mills have accumulated raw material stocks with northern mills still buying from ports are still in the process of replenishment.

Rationale: One pellet export deal was heard to have concluded from an Odisha based player in this publishing window. An export deal for 55,000 t pellets (Fe 64%, 3% Al) was concluded at about $ 207/t, CFR China. However, the deal could not be confirmed till the time of publishing the report. Hence, not considered for price calculation as T1 inputs and given a weightage of 0%.

SteelMint has received eight indicative prices, offers and bids (T2) and all were taken into consideration with an average price of $194/t FOB India and given a weightage of 100%.

• Spot iron ore fines price down by $4/t – Chinese spot iron ore fines (Fe 62%) index decreased by around $3.85/t on a daily basis yesterday (26th Jan) and stood at $164.65/t CFR China against $168.5/t a day before. On a weekly basis, prices dropped by around $9/t against last week at $ 168.9/t, CFR China.
• Pellet inventories at Chinese ports decrease further – Pellet inventory at major Chinese ports have decreased last week to 5.9 mn t against 6 mn t a week before as per data maintained by SteelHome. On a monthly basis, inventories have come down by 1.2 mn t against 7.1 mn t a month before.
• Domestic pellet prices in eastern India fell on the weaker market sentiments- Indicative prices from Barbil have dropped in the domestic market. SteelMint’s pellet price assessment from Barbil (Odisha) assessed at INR 11,600-11,800/t (loaded to wagon) as against INR 11,800-12,000/t (loaded to wagon) last week. Trades in the domestic market have remained less due to limited buying inquiries on the falling sponge prices.