SteelMint’s India pellet export index slips on falling global iron ore fines prices

India’s pellet export market witnessed limited trades this past week. SteelMint’s India pellet (Fe 63%, 3% Al) export index, FOB east coast, decreased by $10/t w-o-w to $134/t on 11 May, 2022 from $144/t on 4 May. The recent drop in iron ore fines CFR China has weighed on bids for Indian pellets.

Rationale

• No deals were reported this week and hence were not taken for price calculation under T1 trade and given 50% weightage in index calculation. Click here for methodology.
• Ten (10) indicative offers and bids were received out of which eight (8) were considered for calculation of the index and given 50% weightage.

Prices have fallen against last week. Towards the end of last week, an eastern India-based pellet producer concluded an export deal for 55,000 t of pellets (63% Fe, 3.5% Al). The deal was heard concluded at $164/t CFR China for May shipment, sources confirmed.

In another deal heard from an eastern-India based player, an export deal for pellet Fe 62% was concluded at a premium of $15-16/t.

State-owned KIOCL floated an export tender for 50,000 t of pellets (62.5% Fe, 8% SiO2+Al2O3). The due date for the tender was 11 May’22 and the tender had been floated only for KIOCL’s empanelled customers. A couple of tenders have also been floated by the company for domestic sales via road and sea routes. However, the tender outcome could not be confirmed till the time this index assessment was put up for publication.

Market highlights

• Global iron ore price down w-o-w on weak demand outlook: The benchmark Fe 62% fines index decreased by $14.35/t w-o-w on 11 May to $128/t CFR China. Seaborne iron ore prices fell on market expectations of weak demand.
• DCE iron ore futures down w-o-w after holidays: Iron ore futures on the Dalian Commodity Exchange (DCE) for September contract closed on 29 April, 2022 (at 3 pm) at RMB 821/t, down RMB 48.5/t ($7/t) as against RMB 869.5/t on 4 May, 2022. On a daily basis, prices increased by around RMB 42/t ($6/t).
• Port inventories in China decrease w-o-w: Pellet inventory at China’s major ports decrease to 4.9 mnt this week against 5 mnt a week ago.