Chinese Mills Further Reduce Bids for Indian Pellets

As per market sources report to SteelMint, Chinese mills are heard to have further reduced bids for Indian pellets by around USD 5/MT W-o-W. Bids from Chinese mills are assessed at around USD 105-108/MT, CFR China levels for regular grade pellet with 3% alumina. However, expectations of Indian pellet makers stand at USD 109-110/MT, CFR China levels. Pellet makers were heard to offer pellets but no deal was heard to have been concluded this week.

The pellet export assessment has softened this week owing to increased preference for lower grade ore. Amidst narrowing steel margins, and need to lower production cost, Chinese mills have increased dependence on lower and medium grade fines, resulting in less pellet export trades from India. Besides, pellets still form comparatively expensive raw material compared to fines and lumps, further reducing pellet exports from India.

The liberal environmental regulations in China compared to previous year and high stock inventories at major Chinese ports, have also led to dull pellet buying interest.

Pellet inventory at major Chinese ports increased to 2.6 MnT this week as against being 2.55 MnT a week ago, as per SteelHome data.

Last week, Essar Steel concluded a pellet export deal for 50,000 MT pellet with grade Fe 64% content and 2.6% alumina. As per the sources, the deal was concluded at around USD 112/MT, CFR, China and the material is for Dec Loading.

Amid falling bids from Chinese mills, Indian pellet makers are also exploring export options in non-Chinese markets like Indonesia and Malaysia.

Spot pellet premium dropped by US 2.60/DMT W-o-W

Spot pellet premium for Fe 65% grade pellets assessed at USD 46.55/DMT, CFR China this week, down by USD 2.60/DMT W-o-W against USD 49.15/DMT /DMT a week before.