Indian pellet export index falls marginally as market awaits China comeback

SteelMint's India pellet export index (Fe 64%, 3% Al, FOB east coast) has come down by around $3/tonne (t) on a w-o-w basis to $134/t. The market has been relatively very silent this week with not many offers/bids seen owing to approaching holidays. However, with the drop in global iron ore fines index, price indications for pellet exports have fallen.

Rationale:

• No deal of Fe 64% grade pellets was heard to be concluded in this publishing window. Hence, the weightage given was 0%.
  
  
• Seven (07) indicative offers and bids were received, and six (06) were considered for calculation of the index, given a weightage of 100%.
  
  

Global iron ore prices declined this week on decreased procurement. The spot price of benchmark iron ore Fe 62% fines dropped by $6/t w-o-w to $117.7/t CFR China on 28 Dec. DCE iron ore futures' May'22 contract closed today at RMB 663/t ($104/t), down by RMB 30/t ($5/t) w-o-w.

Pellet inventory at China's major ports was recorded at 3.8 million tonnes (mn t) on 16 Dec'21, as against 4 mn t a week ago. No further stock movement happened so far this week.

"Price levels of $150/t CFR look skeptical when global prices have fallen. We will be offering the material for further laycans next week," said an eastern India-based pellet player.

However, SteelMint learned one deal for 50,000 t high-grade pellets (Fe 65%, 2.5% Al) to have concluded by an eastern India-based player recently.

Domestic pellet prices increase: As per SteelMint analysis, domestic pellet (Fe 64%, 3% Al) ex-plant realisation is assessed at INR 8,200-8,300/t for Barbil, eastern India. On the other hand, SteelMint's domestic price assessment for the Barbil region stood at INR 9,300-9,400/t loaded to wagon, up by INR 500/t w-o-w.

" There are not many offers at present. Seaborne iron ore prices crashed which might lead shippers to wait for some upward movement," a trader said.