Indian pellet export shipments drop to over two-years low in Oct on higher domestic realizations

Indian pellet export shipments in the month of Oct’20 were recorded at 0.66 mn t, as per data maintained with SteelMint. The exports have dropped to over two years low as the level was last witnessed in Aug’18 at 0.45 mn t. On a monthly basis, exports decreased by 15% as against 0.78 mn t in Sep’20.

Factors behind fall in export volumes –

•  Domestic pellet prices increased sharply due to tight availability of high grade iron ore in Odisha as majority of auctioned mining leases are yet to resume production. SteelMint’s pellet price assessment for Barbil in Odisha has increased by around INR 600/t m-o-m. Towards end-Oct’20, export realizations were lower by INR 200/t than in domestic market, which limited export trades
• Amid heated discussions of pellet export duty, exporters/traders were a little hesitant on concluding new export deals. However, the Department of Commerce under the Ministry of Commerce & Industry issued a clarification on 8th Oct’20 to the effect that duty-free pellet exports were going on even before 2014 and that export policy restriction put in place in 1998 was only for KIOCL.
• The Chinese week long golden week holidays from 1st Oct-7th Oct’20, slowed down the buying inquiries .

Indian pellet export volumes to China halved in Oct’20
China continued to remain the largest importer of Indian pellets in Oct’20 at 0.33 mn t, down 50% m-o-m. Indonesia stood second largest importer at 0.11 mn t followed by Malaysia at 0.10 mn t.

Shipper-wise exports in Oct’20
BRPL stood the largest pellet exporter for the month at 0.28 mn t , up significantly against 0.04 mn t in Sep’20. Other major exporters were – JSPL at 0.11 mn t (down 57% m-o-m) and Godawari Power at 0.11 mn t.

Qty in mn t, Provisional data,
Source: SteelMint Research, Customs

Paradip port accounted for 59% of total monthly export
In Oct’20, exports from Paradip port stood at 0.39 mn t followed by Gangavaram port and Dhamra port at 0.11 mn t each.

Outlook – Indian pellet exports are likely to fall further on improved domestic realizations, scheduled plant maintenance at few plants, and tight availability of iron ore fines.