India’s pellet (Fe 64%, 3% Al) export index (FOB east coast) has risen by $5/t to $168/t from $163/t on 2 Feb’22. The export market regained momentum following the opening up of the China market after the CNY holidays, supported by production curbs during the ongoing Winter Olympics, which supported the demand for pellets.
Two export deals were concluded from eastern India in this publishing window. One deal for 55,000 t of Fe 63% pellet was heard concluded at around $183-185/t CFR China. However, confirmation from sellers could not be received till the time of publishing this index. Another index-based export deal from eastern India was heard concluded.
Rationale:
- Two deals were reported this week, although owing to pending confirmation were not considered under T1. Hence, given no weightage in index calculation.
- Three (03) indicative offers and bids were received, and two (02) were considered for calculation of the index, given 100% weightage.
“Pellet export price indications were quite strong till yesterday. However, with a sharp correction in iron ore futures today, sentiments have drooped a bit”, a source highlighted. A few tenders from KIOCL, etc. were also heard in the market today.
Iron ore futures on the DCE for May’22 contract closed today at RMB 781/t, down RMB 40/t ($6) d-o-d. Futures dropped in China after the rally over the past couple of days after Chinese regulators intervened due to irregular price fluctuations.
The benchmark Fe 62% fines index inched up $0.55/t on 8 Feb to $149.95/t CFR China. Seaborne iron ore prices increased as the bullish demand outlook persisted. Portside activity rose as more market participants returned after the holidays.
Port inventories in China stable, w-o-w – Pellet inventory at China’s major ports remains stable at 4.05 mnt this week against a week ago.
Domestic realisation largely at par with exports – As per SteelMint assessment, pellet (Fe 64%, 3% Al) ex-plant realisation for export is assessed at INR 11,100-11,200/t for Barbil, eastern India.
On the other hand, pellet prices in India increased on healthy demand and producers were still exporting sizeable volumes as price realisation in the export market remained attractive.
SteelMint’s assessment for pellet prices in the Barbil region stood at INR 11,400-11,500/t loaded on to wagon. An eastern India-based steel mill recently booked around 150,000 t of pellet (Fe 63%) from various suppliers in the region at INR 11,200-11,300/t loaded to wagon.
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