India: Pellet export prices rise by $2/t w-o-w in recent trades

• Chinese Lunar holidays start 29 Jan'25
  
  
• Active pellet export deals seen from India
  
  

The seaborne pellet market witnessed a firm price trend last week, supported by active deals in the Indian Ocean. Buyers, particularly in China, showed strong interest in securing Indian pellet cargoes for post-Lunar New Year delivery. This led to multiple transactions being concluded ahead of the holiday period, pushing prices higher.

BigMint's India pellet (Fe 63%, 3% Al) export index (FOB eastern coast) rose by $2/tonne (t) w-o-w to $104/t on 29 January 2025. Three cargoes of 175,000 t (Fe 63%, 7-8% AL2O3+SiO2) were concluded at $111-113/t CFR China, scheduled for February from suppliers in Odisha.

Another manufacturer concluded around 100,000 t of pellet (Fe 63%, 2% Al2O3) export deals through tender recently, sources informed. Seaborne buyers showed interest in low-alumina material and it was heard that deals were concluded at $109-110/t FOB India.

The gap between export and domestic realisations slightly narrowed this week amid an improvement in export offers against stable domestic prices. Domestic prices exceeded export offers by INR 700/t ($8/t).

Pellets (Fe63%) in Odisha's Barbil recorded w-o-w at INR 7,700/t ($89/t) exw. Meanwhile, ex-plant realisation in exports from Barbil stood at INR 7,000/t ($81/t) exw.

A market participant said: "The market was well-supported by consistent demand from Chinese buyers, especially for high-grade Indian pellets. Sellers were keen to finalise deals before the holiday break, leading to a notable uptick in spot prices."

However, with the Lunar New Year holidays now underway from 29 January, major market participants have exited, leading to a temporary slowdown in trading activity. The market is set to reopen on 5 February, when clearer price trends and buying sentiment will emerge.

A pellet producer from the East Coast informed, "Some pellet export tenders also saw active participation, with competitive bids supporting the price momentum. We saw good demand in the past week, with buyers locking in cargoes in expectation of a post-holiday price rebound."

Rationale

• One (1) deal was recorded this week for T1 trade. Thus, this category was taken into consideration for today's price calculations and accorded 50% weightage in the index calculation. Click here for detailed methodology.
  
  
• Twelve (12) indicative prices were received, and Seven (7) were considered for the calculation of the index and given a 50% weightage.
  
  

Factors impacting pellet exports

• Chinese iron ore fines stable w-o-w: The benchmark iron ore fines index largely stable w-o-w to $105/t CFR China on 28 January. Procurement activities in the physical market had significantly cooled ahead of the holidays as most market participants were away, sources said. The paper market, however, continued to see some fluctuations due to the spillover effect from the news related to the property developer in China.
  
  
• China's portside pellet prices stable w-o-w: Chinese sources said that Qingdao's portside offers for Indian pellets (Fe 63.5%) remained stable w-o-w at RMB 955/t ($130/t) on 28 January, inclusive of all import taxes and port charges.
  
  

Outlook

According to BigMint's estimates, the near-term outlook is uncertain for pellet export as buyers are not available in the market. A clearer market picture will be seen post holidays next week.

A pellet seller from Odisha said, "Post-holiday market dynamics will depend on Chinese steel mill restocking interest and overall economic conditions. For now, the market remains in a wait-and-watch mode as the Lunar holiday has started from 29 January."