Chinese Steel Mills Lower Pellet Inquiries; Prefer Low Grade Ore

SteelMint in conversation with market participants learned that Chinese mills have lowered inquiries for pellets and high grade ore amid shrinking steel margins. Indian participants were expecting market sentiments to remain optimistic after Chinese Lunar New Year holidays, however the scenario has not remained similar now.

Indian pellet makers stated decline in pellet inquiries from Chinese steel mills. Mills were heard to have shifted to low grade iron ore amid shrinking steel margins. Discounts on low grade ore has come down to 33% against previous discount of 37%.

This has reduced bids for pellets and high grade ore. Although no fresh deals were reported but indications for buying interest of Indian pellet export prices was heard around USD 115-120/MT, CFR China for 3% Alumina pellets.

Last deal reported a week back was done by southern India based pellet maker - KIOCL at around USD 116/MT, FoB India for lower Alumina pellets.