Indian pellet export market remains quiet on price volatility

SteelMint’s weekly pellet export index (FOB east coast India) for Fe 64% grade has decreased marginally by $1/t w-o-w to $180/t. Iron ore fines & pellet prices have seen sharp fluctuations owing to tightening environmental curbs in China. This has kept majority of Indian pellet players out of the export market this week.

China’s iron ore market is yet to clearly understand the impact of new pollution curbs on steelmakers in Tangshan. In addition to previous restrictions announced, the local authority has proposed to lower 30%-50% emission rate for this year. Escalating sintering and production curbs in Tangshan raised price volatility, keeping fines buyers on the sidelines.

Earlier, towards the beginning of this month iron ore procurement in China’s Tangshan slowed down significantly due to strict implementation of environmental controls on truck deliveries and sintering operations on March 9, following a renewed emergency response to heavy pollution on March 7.

Indian pellet export market has remained very quiet, but few inquiries are heard around $205/t CFR for standard grade pellets. Demand is low at the moment. However, it would be interesting to see if there will be any impact of Suez Canal blockage on European pellet supplies to Asian markets, highlighted traders.

Rationale:

• No pellet export deal was concluded in this publishing window. Hence not taken into consideration for price calculation as T1 inputs and kept the weightage nil in this index.
• Apart from trades, SteelMint has also received eight (8) indicative prices, offers and bids (T2). Out of which seven (6) were considered as T2 trades and given a weightage of 100% in this index.

Spot iron ore fines price decrease by around $6/t w-o-w- Spot iron ore fines Fe 62% price decreased to $160.5/t yesterday as against $ 166.3/t a week before. However, on a daily basis prices were up by $4/t yesterday.

Pellet inventories at Chinese ports increase marginally – Pellet inventory at major Chinese ports have increased by 0.2 mn t to 5.8 mn t last week against 5.6 mn t a week before as per data maintained by SteelHome. On a monthly basis, inventories moved down by around 0.4 mn t to 6.2 mnt a month ago.