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Indian pellet export market turns silent as ferrous futures plunge, index falls by $8/t

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Fines/Lumps

BigMint Bureau

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10 Mar 2021, 19:42 IST

Indian pellet export market turns silent as ferrous futures plunge, index falls by $8/t

SteelMint's weekly pellet export index (FOB east coast India) for Fe 64% grade has decreased sharply by $8/t w-o-w to $177/t. Owing to a sharp fall in iron ore futures market seen yesterday, and uncertainty amid environmental restrictions, the Indian pellet export market turned quiet with few exporters withdrawing their offers.

"There are no firm bids from Chinese buyers after futures crashed yesterday. The market is completely silent. Few indications were even heard lower than $195/t CFR China levels, highlighted by traders".

Chinese govt. has tightened the environmental measure last week on lesser air quality improvement. Regulation from the authority seems to be more stringent this time to control the pollution and bring it to acceptable levels. Therefore, steelmills in China are more concerned and expected that this may impact on steel production and procurement of iron ore as well. There are certain restrictions on port for truck movement also.

Rationale: Two pellet export deals were concluded in this publishing window. No one was taken into consideration for price calculation as T1 inputs and given a weightage of 0%. One deal was not confirmed from the seller or buyer at the time of publication and another deal was done towards the end of last week.

India pellet export

Apart from trades, SteelMint has also received seven (7) indicative prices, offers and bids (T2). Out of which six were considered as T2 trades and given a weightage of 100% in this index.

Spot iron ore fines price plunge by $11/t- Spot iron ore fines Fe 62% price decreased sharply $10.55/t on daily basis yesterday. The prices witnessed at $163.6/t yesterday as against $ 174.15/t a day before yesterday. On w-o-w basis prices were decreased by $14/t against a week before.
Freight rates remain stable - Freight rates for 50,000-55,000t export vessels from east coast India (Paradip) to China stable at $ 23-24/t this week.
Pellet inventories at Chinese ports decline further - Pellet inventory at major Chinese ports have decreased by 0.5 mn t to 5.5 mn t last week against 6 mn t a week before as per data maintained by SteelHome. On a monthly basis, inventories have declined by 0.15 mn t against 5.65 mn t a month before.