An Indian pellet exporter is heard to conclude a deal at USD 86-87/MT CFR China. The shipment will be made in the month of Oct’16.
There is a USD 3-5/MT drop in Indian pellet export prices in a week’s time. This is because of the fall in pellet premium and steel prices in China.
It is to be noted that spot pellet premium for Indian grade pellets is currently hovering in the range of USD 28-29/MT. There had been reduction in pellet premium of USD 5/MT in a week’s time owing to closure of Chinese market during Mid-Autumn Festival held between 15 Sept-17 Sept’16.
Bearish steel sentiments prevail in the Chinese market. Chinese domestic billet prices also dropped by USD 12-13/MT in a week’s time. Currently, export offers for Chinese billet are at USD 335/MT,FOB China main Port. if this situation persists, falling steel prices will impact global iron ore prices, thereby making a tough choice for Indian pellet exporters to go for exports.
There are mixed responses in Indian pellet industry. Few exporters are mainly focusing on exports due to higher realization and few are entirely selling their material in the domestic market.
East India based Rashmi Metaliks, who entered the export market last month and concluded an export deal is entirely offering the pellets in the domestic market. Current offers for Fe 63% pellets are at INR 4,000/MT basic.
Odisha-based pellet manufacturer view export as a potential market rather than domestic due to realization difference of INR 400-500/MT.
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