SteelMint’s Indian pellet export index (Fe 64%, 3% Al, FoB east coast) has recorded a marginal hike of around $1/t w-o-w stands at $230/t.
“Chinese ports are still not allowing vessels from India to berth immediately and are making them wait for around 21-28 days due to COVID-19 cases in India”, a global trader told SteelMint.
One pellet producer revealed to SteelMint that concluding export deals on CFR basis has become risky in the current scenario.
“We are getting to hear of mixed sentiments at the moment. Logistical constraints and the quarantine regulations are big concerns. A few export tenders concluded a week or so back by trading companies are now hunting for bids ”, shared another trader source.
On the other hand, declining port stocks in China and increasing iron ore spot prices have kept pellet export prices supported. Not many offers were heard in the market today. Limited bids from China and the recent sharp hike in Odisha iron ore prices have resulted in pellet makers entering a wait and watch mode before quoting offers.
Major Odisha-based merchant iron ore miner Serajuddin and Co. has revised offers from its Balda iron ore block with effect from 15 Jun’21. Current offers for lump ore (5-18 mm, Fe 63%) are being heard at INR 13,750/t, ex-mines (including royalty, DMF & NMET) and those for fines (Fe 63%) stand at INR 10,300/t, SteelMint learnt from sources. Offers for lumps have moved up by INR 1,250/t, while those for fines have increased by INR 800/t.
Rationale:
- No export deal was concluded in this publishing window and hence calculation as T1 weightage kept 0% in this index.
- SteelMint has also received nine (09) indicative prices, offers and seven (07) were considered as T2 trades and given a weightage of 100% in this index.
Key market highlights-
Spot iron ore prices rise – The spot price of iron ore increased around 9% w-o-w on 16 Jun against $232.35.40/t, CFR China, observed last week. On a daily basis, prices remain stable. DCE iron ore futures Sep’21 contract closed at RMB 1,197.5/t ($187) (-RMB 28) d-o-d.
Downslide in inventories at Chinese ports – Pellet inventory at major Chinese ports decreased to 3.6 mn t last week, as per data maintained by SteelHome. Inventories are at their lowest level since SteelMint began maintaining data in Jul’20.
Freight rates remain stable- Freight rates for 50,000-55,000 t export vessels from India’s east coast (Paradip) to China are up slightly by $23-24/t compared to last week.
Domestic pellet prices exhibit mixed trends – SteelMint’s bi-weekly domestic pellet index, “PELLEX”, stands at INR 16,200/t, DAP Raipur, down by INR 100/t against the previous assessment made on 11 Jun’21. Pellet offers have remained stable in the majority of markets except in Bellary & Kandla, with producers hiking offers by upto INR 500/t.
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