India: SteelMint's pellet export index stable w-o-w; deals of over 300,000 t recorded

SteelMint's India pellet (Fe 63%, 3% Al) export index FOB east coast remained stable w-o-w at $107/t on 19 July, 2023. The inquiries in the pellet export market have seen an increase.

A total of six deals of around 370,000 t were concluded from India in the past one week, as per data recorded by SteelMint. The market for pellet and high-grade material in China has improved as margins have increased with hike in steel prices.

However, India's pellet export shipments at Indian ports have dropped and were recorded at 106,850 tonnes (t) in the second week of July compared to 218,079 t in the first week of July, as per vessel line-up data maintained with SteelMint.

Rationale

• No deal was recorded this week and was not taken into calculation. Thus, given a 0% weightage in the index calculation.
  
  
• Six (6) indicative offers and bids were received, and five (5) were considered for calculation of the index, and given a 100% weightage.
  
  

Market highlights-

• Gap between export-domestic realisation widens: Domestic pellet (Fe 63%) prices stood at INR 7,650/t loaded on to wagon for Barbil, eastern India. On the other hand, SteelMint's pellet export ex-plant price realisation for the Barbil region went down slightly to INR 7,100-7,150/t exw this week. The price gap between the two has widened and remained largely range-bound against last week.
  
  
• Global iron ore prices rise sharply: The benchmark Fe 62% fines index decreased by $8.25/t w-o-w to $115.85/t CFR China on 18 July. The Chinese government may introduce some measures to boost the economy which triggered strong buying interest in the seaborne market. The improvement in import margins is also drawing some market participants to favour seaborne stocks over portside.
  
  
• DCE iron ore futures inch up w-o-w: Iron ore futures on the Dalian Commodity Exchange (DCE) for September 2023 contract inched up by RMB 9/t ($1/t) w-o-w to RMB 834/t ($116/t) on 19 July (at 3 pm) as compared to RMB 825/t ($115/t) last week. Prices decreased by RMB 11/t ($2/t) d-o-d.
  
  
• China pellet port inventories fall w-o-w: Pellet inventories at China's major ports decreased by 0.5 mnt to 6.2 mnt on 13 July compared to the previous week.