Pellet exports prices from India have climbed to almost 38 months high in the recent tender conducted today. According to market sources, JSPL – an Odisha (east India) based pellet maker conducted an online auction for pellet exports today for about 50,000 MT quantity for end Sept’17 shipment.
According to market participants report to SteelMint, the highest bid received was at around USD 121.5/MT, CFR China which is equivalent to USD 112-113/MT, FoB India.
This is higher by USD 7-8 against SteelMint’s last week assessment of Indian pellet export prices of USD 114-115/MT, CFR China.
Today’s auction has taken Indian pellet export offers to hit 38 months high as these levels were last seen in beginning of Jul’14. Company’s previous auction conducted on 22 Aug’17 received highest bid around USD 111-112/MT, CFR China.
Spot pellet premium is assessed around USD 36.9/DMT, CFR China.
Robust demand for high grade material has lifted prices further. Chinese steel mills are preferring usage of high grade material to lessen the increase in cost of coking coal. Apart from this, strict environmental restrictions imposed by Chinese government have forced steel mills to focus on purchase of high grade material.
Also iron ore port inventories have witnessed drop in past few weeks leading to increased demand of high grade ore at ports. Iron ore & pellet inventory at Chinese major ports declined to 133.4 MnT towards the end of last week. Pellet inventory at ports have come down to 1.35 MnT in the similar time frame.
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