India: Pellet export prices rise by $3/t w-o-w amid positive market trends

• Pellet export demand expected to soften
  
  
• Some export deals concluded last week
  
  

The seaborne pellet export market remained supported last week due to optimistic macroeconomic news from China. Indian sellers managed to conclude a few deals during this period, reflecting steady interest from buyers.

BigMint's India pellet (Fe 63%, 3% Al) export index (FOB eastern coast) rose by $3/tonne (t) w-o-w to $102/t on 22 January 2025. Three deals were recorded in this publishing window, with a few deal confirmations still pending. Two cargoes of 110,000 t (Fe 63%) were concluded at $112-113/t CFR China, scheduled for February from suppliers based in Odisha. In another deal, 50,000 t of pellets were exported at $108-110/t FOB India last week.

The gap between export and domestic realisations slightly narrowed this week amid an improvement in export offers against stable domestic ones. Domestic prices exceeded export offers by INR 700/t ($8/t). Pellets (Fe63%) in Odisha's Barbil remained stable w-o-w at INR 7,550/t ($87/t) exw. Meanwhile, ex-plant realisation in exports from Barbil stood at INR 6,850/t ($79/t) exw.

A trader commented, "The market experienced a shift in sentiment as demand seemed to weaken this week. Most buyers have adopted a cautious approach, choosing to hold off on new trades. This hesitation is largely due to Chinese mills nearing the completion of their restocking of raw materials for February delivery."

Some market participants are waiting for the bids in NMDC pellet export tender which may give some optimistic price boost to pellet export and hopefully deals may get better realization.

Adding to the subdued sentiment, Indian sellers reported bid-offer disparity in the export market. An exporter informed, "There's still a $4-5/t gap in prices, which is challenging for closing deals. We are receiving regular inquiries for the export cargo but waiting for the better price to conclude the transactions."

Rationale

• No deals were recorded this week for T1 trade. Thus, this category was not taken into consideration for today's price calculations and accorded 0% weightage in the index calculation. Click here for detailed methodology.
  
  
• Twelve (12) indicative prices were received, and Ten (10) were considered for the calculation of the index and given a 100% weightage.
  
  

Factors impacting pellet exports

• Chinese iron ore fines prices up w-o-w: The benchmark iron ore fines index rose by $4/t w-o-w to $105/t CFR China on 21 January. The uptick was attributed to improved market sentiment driven by recent macroeconomic developments. The US announcement to delay additional tariffs on Chinese imports boosted confidence, while a stronger Chinese Yuan against the US Dollar further bolstered the outlook.
  
  
• DCE iron ore futures rise w-o-w: Iron ore futures on the Dalian Commodity Exchange (DCE) for the January 2025 contract increased by RMB 18/t ($2.5/t) w-o-w to RMB 800.5/t ($111/t) on 22 January. On a d-o-d basis, futures remained under pressure, dropping RMB 4/t ($0.5/t).
  
  
• 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 22 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 global buyers are not purchasing aggressively. Indian sellers are exploring local opportunities, but the export market may face additional challenges unless demand improves ahead of the Lunar holidays.