India: Pellet export shipments downtrend continues, Nov sees 36% m-o-m fall

India's pellet export shipments have continued to drop in November amid weak demand from China and lower price realizations. The shipments witnessed a sharp decline of 36% m-o-m to 0.17 million tonnes (mn t) as compared to 0.26 mn t in Oct'21, as per data maintained with SteelMint. Notably, pellet export shipments had already hit over a 5-year low in Oct'21 and in line with expectation, volumes have fallen further in Nov'21.

Nil exports recorded for China in Nov'21

Indonesia emerged as the largest importer of Indian pellets in Nov'21 at 115,210 tonnes (t), moving up by 117% as against 53,000 t in Oct'21. South Korea stood as the second-largest importer of Indian pellets at 52,000 t.

Pellet exports from India to China remained nil for the month as against 99,460 t in Oct'21. The imports slid due to steel production curbs.

Shipper-wise exporters in Nov'21

Southern India-based KIOCL was the largest exporter in Nov'21 at 115,210 t, up against 110,000 t in Oct'21. Godavari Power stood as the second-largest exporter at 52,000 t.

Mangalore Port accounts for 46% of total exports

In Nov'21, exports from Mangalore Port stood at 115,210 t with 69% share, up against 110,000 t in the previous month. This was followed by Gangavaram Port with 52,000 t.

Export realisations still remain lower than domestic

SteelMint's pellet export index (Fe 64%, 3% Al, FOB east coast) fell to $129/tonne (t) as assessed in end-Nov'21 compared to $147/t assessed towards end-Oct'21. With export prices falling sharply, Indian pellet makers turned aggressive in domestic sales, quoting higher than in exports.

On the other hand, SteelMint's domestic pellet index was recorded at INR 11,490/t ($152), DAP Raipur in Nov'21, showing higher realisations in domestic bookings.

Outlook

In view of lower bookings in Nov'21, the number of deliveries for December are likely to decline further. Chinese blast furnace restrictions along with low steel margins and finished steel demand pressured lumps demand for the most part of November. However, lump premiums have stabilised lately on recovering steel margins, weakening coke prices and the scarcity in pellets supply into China. The winter sintering controls also provided support to lumps usage in Chinese blast furnaces.

It would be interesting to see if these factors would support pellets demand in China or not.