Favorable global market conditions and sudden increase in global iron ore prices have turned Indian pellet manufacturers active. In addition, rising pellet demand in China has also attracted Indian pellet makers for exports.
Indian pellet export offers are currently hovering at USD 83-84/MT, CFR China for Aug shipment deliveries. In addition for September shipment deliveries, Indian pellet offers will come around USD 82-83/DMT, CFR China.
JSPL, BRPL, Essar Steel are the key Indian pellet exporters participating actively in pellet exports.
JSPL-lined up around 5-6 pellet export vessels for Aug deliveries
One of the merchant -pellet manufacturer, namely Jindal Steel & Power (JSPL), have lined up around 5-6 vessels for the month of Aug’16. All the export shipments are likely to be exported to China.
In Jul’16, due to high congestion at Chinese ports, the company exported only 1 vessel out of the total 5 booked vessels. However, in Aug’16, the company will be exporting the 4 left over vessels booked in the month of Jul’16.
In addition, the company is doing the mechanical loading of the material in ports in spite of manual loading.
Few more east India based pellet makers gear up for exports
According to some market sources, recently Essar Steel also concluded a pellet export deal at USD 83-84/MT CNF China prior this week.
Rashmi Metallics has concluded one deal recently, Arya Iron and Steel is also under talks to conclude one pellet export deal. JSPL, BRPL is consistently exporting pellets to China. Rising global prices and better realizations have opened up opportunities for pellet makers in India.
In addition, another market participant shared that pellet export offers of Shyam Metalics & Energy are USD 69.5/MT, FoB Paradip Port.
Reasons behind increase in demand for Indian pellets:
1.Chinese miners’ plan for anti-dumping investigation rose global iron ore fines prices by USD 5/MT
Chinese miners plan for anti-dumping investigation on imports of iron ore from Australia and Brazil has increased global iron ore prices (Fe 62% Australian fines) sharply by USD 5/MT. Currently, prices are at USD 61/MT, CFR China.
2. Pellet premium touches new highest at USD 25.5/DMT
Pellet premium is currently assessed at USD 25.5/DMT. Pellet premium is continuously increasing due to increased demand of pellet in China.
Due to ongoing environmental inspections in steel mills, use of sinter as a raw material feed is been restricted in China. As a result of which Chinese steel mills are using either lumps or pellets to feed their mills, which has created a demand for pellets in China.
Few of the trade sources shared, pellet premium is likely to increase further and may touch to a level of USD 27/DMT in the coming term.
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