SteelMint: India’s pellet export index rises $8/t w-o-w on active trades

SteelMint’s India pellet (Fe 63%, 3% Al) export index FOB east coast was recorded at $126.5/t, up $8.5/t w-o-w due to positive buying interest and some active deals. Indian pellet export prices have risen on the back of a hike in global iron ore prices as China’s real estate market is expected to rebound with the help of more stimulus by the government.

India mills concluded around three pellet export deals this week. A couple of deals were heard concluded from an Odisha-based pellets producer for 110,000 t of pellets (Fe 63%, 3% Al) at $138-139/t CFR China for Mar’23 shipment, sources confirmed. Another pellet-maker concluded a 55,000 t pellet (Fe 64%, 7% SiO2+Al2O3) deal at $136-138/t FOB yesterday.

India’s pellet export shipments for the second week of February were recorded at 380,651 t  in comparison with 130,000 t in the previous week, according to vessel line-up data maintained with SteelMint.

Rationale

• Two deals were taken for price calculation under T1 trade and given 50% weightage in index calculation.   Click here for methodology.
• Nine (9) indicative offers and bids were received, and seven (7) were considered for calculation of the index, given 50% weightage.

Market highlights:

• Export realisations increase: Domestic pellet (Fe 63%, 3% Al) assessement stood at INR 9,800-9,900/t ($118-120/t) loaded on to wagon for Barbil, eastern India. On the other hand, SteelMint’s pellet export prices ex-plant for the Barbil region also increased along with global price hike this week to around INR 8,600/t ($103/t).
• Global iron ore prices increase: The benchmark Fe 62% fines index increased by $8.1/t w-o-w on 21 February to $131.85/t CFR China as against $123.75/t a week ago. Downstream steel demand is already increasing as Chinese employees return to work following the Lunar New Year holidays. Sources stated that steel demand is expected to increase, as China’s government may offer further stimulus to support the property market.
• DCE iron ore futures rise w-o-w: Iron ore futures on the Dalian Commodity Exchange (DCE) for May 2023 contract closed on 22 February (at 3 pm) at RMB 909.5/t, up RMB 44/t ($6/t) as against RMB 865.5/t on 15 February. Prices inched down by RMB 9.5/t ($1/t) d-o-d.
• Port inventories in China rise: Pellet inventory in China’s major ports stood at 6.7 mnt this week against 6.5 mnt a week ago.