In week 17, seaborne pellet premium moved up further by USD 3/DMT W-o-W.
Pellet premium escalated by USD 3/DMT W-o-W and was assessed at USD 21/DMT, CFR China for Fe 65% BF grade pellets.
Towards the beginning of Oct’15, seaborne pellet premium was assesed at USD 19.25/DMT, CFR China after which it witnessed a downtrend. But since beginning of 2016, it observed an upward movement and in this week it has crossed its previous high and stood at USD 21/DMT, CFR China.
There were not many offers of seaborne pellet available in Chinese stock market and major miners seemed to be interested in selling cargoes in countries like Japan and Korea where pellet premium is comparatively high.
Rising pellet premium is attracting Indian pellet exporters to go for pellet exports. Currently prices for pellet (Fe 65%) are assessed at USD 86.8/MT, CFR China.
Seaborne lump premium moves up by 14% in week 17
Stronger steel margins and tighter lump availability at Chinese ports forced lump premium to increase further this week.
Spot lump premium which was assesed at USD 0.1825/DMT, CFR China in week 16 has increased to USD 0.2075/DMT, CFR China in week 17.
Stock of lump cargoes at Chinese major ports has fallen further. Stock of lump cargoes was recorded at 11.3 MnT on 15 Apr’16. The figure declined to 10.6 MnT by the end of this week.
Another factor that supported hike in lump premium is strong steel margins. Increasing global iron ore prices backed by strong steel sentiments forced lump premium to move high. Domestic rebar (HRB 400) prices in Shanghai (China) have increased by USD 62/MT W-o-W to USD 447/MT (ex-works).
Some traders in China in anticipation of further price hike have stopped offering their material at ports and are keeping some cargoes in hand when they have a chance to fetch high prices for the same.
Leave a Reply