Indian Pellet Exports May Remain Low as Domestic Realizations are High
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During first eight months (Apr-Nov) of FY'18 Indian has exported 6.09 MnT pellets against 4.67 MnT in the same period last year. China has by far remained the largest destination for Indian pellets with a share of 80%. Other major destinations were Oman, South Korea, Japan, etc.
A recent hike in domestic pellet offers by Indian manufacturers post iron ore price hike has made exports less attractive amid high domestic realizations.
Indian pellet export price assessment stands around USD 117-118/MT CFR China. This is equivalent to USD 107-108/MT FoB which is equivalent to INR 5,200-5,300/MT (loaded to wagons basis) in Barbil (Odisha).
Whereas on the other side, domestic pellet prices in eastern India have increased and are hovering in the range of INR 6,400-6.500/MT (USD 100-102/MT) loaded to wagons basis.Indian domestic pellet prices have been increasing because of hike in iron ore fines price. Odisha based merchant miners have raised fines prices by INR 300/MT w.e.f 2 Jan'18.
East India based pellet manufacturers seem more interested to sell in the domestic market than to go for pellet export. As the report suggests domestic market realization is much lucrative, resulting in less interest in exports.
Since past few weeks, Chinese steel mills have been preferring making pellets out of imported concentrate rather than importing pellets, making sentiments in Indian pellet export market dull.
Realization of Indian pellet export prices-:
| Particulars | Currency | Prices |
| CFR China 63% Fe Pellets (BF grade) | USD/dmt | 118 |
| Moisture | % | 3.00% |
| CFR China 63% Fe Pellets | USD/wmt | 114 |
| Freight (India east coast-China, Supramax) incl demurrage, | USD/wmt | 14 |
| FOB | USD/wmt | 100 |
| Export Duty | % | Nil |
| FOB | USD/wmt | 100 |
| Exchange rate (USD:INR) | INR | 63.4 |
| FOB India | INR/wmt | 6,343 |
| Port Charges | INR/wmt | 300 |
| Logistics cost from Plant to Port | INR/wmt | 800 |
| Pellet Price (Loaded to wagons) | INR/wmt | 5,243 |
Source: SteelMint Research
Realization in export is INR 5200-5300/MT for export while current domestic offers are around INR 6400-6500/MT. Thus realization in the domestic market is higher by INR 1200/MT than in exports.
Indian pellet exports in FY18-:
During first eight months (Apr-Nov) of FY'18 Indian has exported 6.09 MnT pellets against 4.67 MnT in the same period last year. China has by far remained the largest destination for Indian pellets with a share of 80%. Other major destinations were Oman, South Korea, Japan, etc.
