According to the market participants reports to SteelMint, Indian pellet export market turned mute amid no bids heard from Chinese mills. Also, no deal was heard to be concluded from quite sometimes. Steel mills in China are not showing any interest for pellets from India. Chinese market is so weak that even traders are not taking position for Indian pellets.
Although no strong bids or offers were heard, assessment for regular grade pellets (Fe 64%) with 3% Alumina is learned to around USD 110-115/MT, CFR China. This is lower by USD 5/MT W-o-W.
On Monthly basis, Indian pellet export price assessment has come down sharply by USD 23/MT.
Spot pellet premium plunge further – Spot pellet premium for Fe 65% grade pellets assessed at USD 53.4/DMT, CFR China this week, down by USD 2.4/DMT W-o-W against USD 55.8/DMT a week before. On monthly basis, premium pellets comes down sharply by USD 21/MT.
Why Indian pellet offers dried up?
1. Low steel Margins in China-: Steel prices are decreasing sharply from the last one month in China. HRC in the export market of China witnesses a significant drop amid decline in futures market. Currently HRC FoB China down by USD 17-20/MT to USD 480-490/MT against USD 502/MT a week ago.
2. Less stringent regulation shifted demand for low/medium grade fines – Amid less strict norms, Chinese steel mills have preferred to purchase fines rather than going for high priced pellets. Global spot iron ore fines (Fe 62%) prices down sharply yesterday (27th Nov’18) by 13% to USD 65/MT, CFR China as against USD 75/MT, CFR China beginning of last week.
3. Domestic Pellets Availability-: Imported pellet buying interest of Chinese mills learned to remain weak owing to increased supply of Chinese domestic pellets, resulting in less pellet export trades from India. Chinese mills are using domestic iron ore concentrate amid less stringent measure imposed on mines and mills.
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