India: Pellet export shipments drop to 8-month low as Chinese demand fades

India's pellet export shipments were recorded at 0.54 million tonnes (mn t) in Aug'21 hitting an eight-month low, as per data maintained with SteelMint. The shipments fell by 54% m-o-m compared to 1.2 mn t in Jul'21.

The decline in export shipments was largely due to lesser Chinese buying because of steel production cuts in this country that has lowered demand for raw material and in turn has pulldown the prices. China's Hebei province, the steelmaking hub located in the northern part of the country, has announced it is aiming for a reduction in its production of crude steel by 21.71 million tonnes (mn t) in CY'21, SteelMint learned from latest reports. Among them, Tangshan, the top steelmaking city in Hebei, plans to cut 12.37 mn t of crude steel output this year, accounting for about 57% of the latter's set target.

Also, quarantine/demurrage concerns continue to remain in place. SteelMint's pellet export index (Fe 64%, 3% Al, FoB east coast) fell from $221/tonne (t) assessed towards the middle of July to $156/t assessed towards the middle of Aug'21.With prices in exports falling sharply, Indian pellet makers turned aggressive in domestic sales,quoting higher than in exports.

Pellet exports to China down 73% m-o-m

China continued to remain the largest importer of Indian pellets in Aug'21* at 0.24 mn t, down by 73% as against 0.9 mn t in Jul'21. South Korea stood as the second-largest importer at 0.14 mn t followed by Oman and Indonesia at 0.05 mn t each.

Shipper-wise exporters in Aug'21*

Eastern India-based BRPL was the largest exporter in Aug'21 at 0.26 mn t, up against 0.22 mn t in Jul'21*. KIOCL stood as the second largest exporter at 0.11 mn t followed by Rashmi Metaliks at 0.06 mn t.

Paradip Port accounts for 68% of total exports

In Aug'21, exports from Paradip Port stood at 0.37 mn t with 68% share, up against 0.35 mn t in the previous month. MangalorePort was second with 0.11 mn t and Gangavaram Port was third at 0.05 mn t.

Outlook
In view of the lower bookings in August, the number of deliveries for September is likely to decline further.This is because bookings to Chinese as well non-Chinese destinations remained subdued on bid-offer disparities.

*correction in the name of months