Indian pellet export price index gains on fines market strength

SteelMint's pellet index (FoB east coast India) has increased by $3/t w-o-w to $109/t on Wednesday (i.e 12th Aug) tracking gains in China spot iron ore prices.

However, Chinese buying interest is muted for Indian pellet, as mills are stepping up proportion of fines in the furnace burden.

Pellet inventory at major Chinese ports has increased to 10.6 mn t this week against 10.2 mn t a week ago.

Meanwhile, Indian pellet makers have increased sales volumes in the domestic market as demand has increased on a shortage of ores in the domestic market.

Pellet makers themselves have been hobbled by a shortage of fines supply in the Odisha market, as 14 of 19 new leaseholders of auctioned mines have yet to start production. Indian pellet exports in Jul was recorded at 1.67 mn t against 1.78 mn t in June.

Three deals were done last week after the Steelmint timestamp.

Rationale:

• No pellet export deal has been concluded so far this week, so there was no T1 category of inputs.
  
  
• SteelMint received three indicative prices and offers in the publishing window. All the inputs were considered for price calculation as T2 inputs, with an average price of $109/t.
  
  
• In the absence of deals, the average of T2 transaction was given a 100% weightage in today's final price calculation. T1 includes confirmed deals while offers, bids, and indicative prices are included as T2 inputs. Both T1 and T2 categories of inputs carry 50% weightage each in price calculation for FOB price assessment.
  
  

India domestic pellet prices rise sharply in the last one month - SteelMint's pellet index PELLEX rose by INR 1,600/t ($21 ) in the last one month on supply tightness and hike in offers.