India's KIOCL Concludes Another 50,000 MT Pellet Export Deal - Sources

Southern India based pellet maker - KIOCL has concluded pellet export deal recently. The company had floated export tender offering 50,000 MT pellet consisting of Fe 64% content with less than 2% alumina. As per the sources, the deal was concluded at around USD 116.5/MT, FoB India. This is the second deal concluded by the pellet maker in a row.

Two days back the pellet maker was concluded an export tender of 50,000 MT consisting of Fe 64% content and less than 2% alumina at around the same price level.

Post Vale disruption, Indian pellet export prices rallied anticipating shortage in seaborne pellet trades. However, market sentiments have turned dull after Chinese New year holidays. Amid shrinking steel margins, Chinese mills prefer low-grade iron ore and concentrate rather than going for high-grade ore & pellets. They also prefer port stocks rather than seaborne cargo.

Spot pellet premium dropped to over 1 year low this week -: Spot pellet premium for Fe 65% grade pellets assessed at USD 35.45/DMT, CFR China this week, down by USD 6.65/DMT W-o-W against USD 42.1/DMT a week before. Last time this pellet premium was seen in the last week of Aug'17. Pellet buying sentiments from Chinese mills remained weak amid sufficient inventories.

Indian pellet exports down 20% in Feb'19-: Indian pellet exports for the month of Feb'19 witnessed a decreased of 20% M-o-M to 0.81 MnT, as against 1.02 MnT a month before in Jan'19. KIOCL exported 0.17 MnT (Up 20%) in the month of Feb'19.

KIOCL's domestic pellet offers - According to market sources report to SteelMint, KIOCL's domestic pellet offer is around INR 8,300/MT on New Mangalore port basis.