India: Jindal Steel Concludes 50,000 MT Pellet Export Deal to China

Jindal Steel & Power -an eastern India based pellet maker has concluded an export deal for around 50,000 MT for regular grade pellets (Fe 64%, containing 3% alumina) towards the end of last week. According to the sources, the deal has been concluded at around USD 110/MT, CFR China.

As per reports, China's top steelmaking city, Tangshan in Hebei province has ordered steel mills and other industrial plants last week to make additional output cuts on top of those already ordered during the winter heating season. The steel mills in smog-prone Tangshan city will be required to shut their shut their sintering capacity by 30-60% or even shut down based on their emission level, while coke plants must extend production time in order to churn out less dust.

Following this, few Indian pellet makers are hopeful of improvement in pellet inquiries from Chinese mills. However, some are of the view that amid declining steel prices, mills may not get into too much of pellet procurement in order to maintain their steel margins.

Towards the beginning of this month, Essar Steel had 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.

Spot pellet premium for Fe 65% grade pellets assessed at USD 46.55/DMT, CFR China last week, down by USD 2.6/DMT W-o-W against USD 49.15/DMT a week before. On monthly basis, premium pellet comes down sharply by USD 22/DMT.

Indian Pellet Exports Up 10% in Nov'18 - Indian pellet exports for the month of Nov'18 witnessed an increase of 10% M-o-M to 1.04 MnT, as against 0.74 MnT in a month before in Oct'18. BRPL was the largest exporter for the month of Nov'18 at 0.34 MnT (up almost six-fold M-o-M), accounting 33% of total Indian pellet export share. Other major exporters were Rashmi Metaliks at 0.22 MnT, KIOCL at 0.17 MnT and JSPL at 0.15 MnT.

Indian pellet export volumes are likely to come down in coming months as demand from China has softened on relaxation of environmental norms over which mills have shifted towards usage of low-grade fines.