SteelMint’s India pellet export index (Fe 64%, 3% Al, FOB east coast) increased by $2.5/tonne (t) on a w-o-w basis to $136.5/t. Amid the rise in global iron ore prices, the market saw a resumption in trading after Chinsese buyers made a comeback to the market.
Rationale:
- Two deals for around 110,000 t of Fe 63% pellets were heard concluded in this publishing window. Hence, after grade adjustment taken under price calculation, the weightage given was 50%.
- Nine (09) indicative offers and bids were received, and eight (08) were considered for calculation of the index, given a weightage of 50%.
“Traders continue to remain active in the market anticipating a price hike in the coming days which has kept the Indian pellet export market active. A private pellet maker floated an export tender today, for which results may be out in the next couple of days”, an eastern India-based market participant highlighted.
State-owned KIOCL has issued three tenders for pellet (Fe 63%, 2% alumina) exports and domestic shipments. The tenders, due on 4 Jan’22 and 5 Jan, are only for KIOCL’s empanelled customers. The minimum quantity offered is 50,000 t. The company’s previous export deal concluded towards early-Dec’21 fetched bids at around $125/t on FOB basis.
Domestic pellet prices range-bound: As per SteelMint analysis, pellet (Fe 64%, 3% Al) ex-plant realisation in exports is assessed at INR 8,300-8,400/t for Barbil, eastern India. On the other hand, SteelMint’s domestic price assessment for the Barbil region stood at INR 9,300-9,500/t loaded to wagon.
Global iron ore prices rise: Global iron ore prices extended gains this week on strong demand for finished steel. The spot price of benchmark iron ore Fe 62% fines moved up by around $7/t w-o-w to $125/t CFR China on 5 Jan. DCE iron ore futures’ May’22 contract closed today at RMB 694/t ($109/t), up RMB 31/t ($5/t) w-o-w.
Pellet inventory at China’s major ports was recorded at 4 mn t on 30 Dec’21 as against 3.8 mn t towards mid-Dec’21.
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