SteelMint’s pellet export index (FoB east coast India) has remained largely stable on a weekly basis and stood at $126/t on 04th Nov’20. Sellers remained active in the domestic sales amid better realization and liquidity, resulting in limited export offers.
According to the market participants, there are limited number of buyers and sellers in the market. Also, there is scarcity of high-grade iron ore fines is a concern. Domestic offers are still very lucrative than the export realization.
However, still expect Chinese stricter pollution control norms to boost pellet demand in coming term.
Rationale: No pellet export deal (T1) heard so far in this week and not considered for calculation of index. Therefore, weightage of T1 transferred to calculation of T2 inputs.
SteelMint has received four indicative prices (T2) and they were taken into consideration with an average price of $126/t FOB India.
Spot iron ore fines price fell marginally – Chinese spot iron ore fines (Fe 62%) fell by around $1.35/t on daily basis and stood at $ 117.7/t CFR China yesterday against $119.05/t a day before. However, on a weekly basis, the price has increased up by $1/t yesterday against $116.95/t CFR a week before.
Pellet inventory at major Chinese ports has decreased by around 1 mn t to 10.25 mn t last week as per Steelhome data.
Chinese steel mills are showing some interest to to buy pellets from port side inventory in the last one week. However, production cuts may support pellet demand in the long run.
Attractive domestic realizations-
Major pellet makers from Barbil increased offers in the domestic market this week. SteelMint’s pellet price assessment from Barbil (Odisha) stands at INR 8,300-8,500/t (Loaded to wagon) this week, up by INR 300-500/t w-o-w.
Pellet export is fetching realization lower by INR 500/t (around $7/t) than prevailing domestic offers of Odisha based maker, as per SteelMint’s analysis.
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