According to market sources report to SteelMint, southern India based pellet maker – KIOCL (Kudremukh Iron Ore Company Limited) has recently concluded a deal of 50,000 MT pellets of Fe 64% grades (less than 2% alumina). As per sources, the deal has been concluded at around USD 117-118/MT, FoB India for July shipment. The company had floated a limited tender 2 days back following which the deal was concluded.
SteelMint’s price assessment for normal grade pellets stands at around USD 119/MT, CFR China; higher by USD 1-2/MT W-o-W. China. Demand for Indian pellets in China continue to remain strong over less Indian supplies owing to the following reasons:
1. Better Realization in Domestic Market-: India pellet makers are getting a better realization in the domestic market over increased offers following recent iron ore price hike in Odisha. In Durgapur (eastern India) reference pellet price assessment stands at INR 6,900-7,000/MT (delivered) this week against last week’s assessment INR 6,800/MT. Barbil pellet price assessment stands at INR 6,500/MT (loaded to wagons) against INR 6,200/MT last week.
2. Monsoon Concerns: Upcoming monsoon in India make domestic sponge manufacturers prefer pellets over iron ore, which may lessen movement for exports further.
3. Logistics issue in the eastern India-: Trade sources highlighted that plants are currently facing extremely low iron ore/pellet rake availability in the eastern region which has hampered material movement.
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