Indian pellet export shipments doubled in Q1 FY21

Indian pellet export shipments in the first quarter of fiscal FY'21 recorded at 5.07 mn t, as per data maintained with SteelMint. On a quarterly basis exports increased almost two folds as against 2.60 mn t in Q4 FY'20. On a yearly basis too, pellet exports picked up as against 2.99 mn t in Q1 FY'20.

Factors which favoured Indian pellet exports for the quarter:

1. Limited domestic demand : The pandemic COVID-19 led to country wide closure, in turn affecting the domestic needs by the steel mills. Also, with steel mills running on low capacity utilization due to lock-down in Apr'20 and early May'20, pellet offtake in the domestic market remained slow. This in turn pushed up Indian pellet makers towards exports.

2. Rise in Chinese Demand : The quarter witnessed a rise in Chinese demand of raw material followed by resumption in construction activities majorly in the first two months of the quarter.

3. Brazilian supply concerns: The concerns over coronavirus have been impacting the Brazilian supplies of iron ore cargoes during the quarter amid rising COVID-19 cases at the iron ore mine in Itabira Brazil, owned by Vale. Vale reviewed its pellet production guidance to 35-40 mn t as compared to previous set at 44 mn t for CY20. The discrepancies over continuous supply of material led to rising exports from Indian mills to fulfill Chinese demand. However, the supply concerns eased towards the month of June'20.

Indian pellet exports to China rose 80% in Q1 FY'21
China remained the largest importer of Indian pellet for the first quarter FY'21 at 4.40 mn t, up 80% against 2.44 mn t in Q4 FY'20. Oman stood second largest importer at 0.37 mn t followed by Malaysia at 0.16 mn t.

BRPL remained the largest pellet exporter
BRPL marked the largest pellet exporter for the quarter at 0.84 mn t , up 35% q-o-q, followed by JSPL at about 0.83 mn t (up 87% q-o-q) and AM/NS at 0.81 mn t.

Qty in mn t, Provisional data,
Source: SteelMint Research, Customs

However, export shipments in the month of June '20 fell by 14% to 1.78 mn t as against 2.07 mn t a month ago according to data maintained with SteelMint. The pellet exports dropped for the month amid easing Brazilian supplies and rising pellet inventories at major Chinese ports which lowered inquiries.