SteelMint: India pellet export index down $2/t w-o-w on sluggish demand

SteelMint's India pellet (Fe 63%, 3% Al) export index FOB east coast was recorded at $113/t, down by $2/t w-o-w, due to low demand in China amid rainy weather. Though steel production in China is high but demand is not up to the mark. As per sources, steel margins are also under pressure, resulting in limited buying for pellets.

"An eastern India-based pellet maker concluded a 55,000 t (Fe 62.5%) export deal last weekend at $133-134/t CFR China", a source informed. However, this has not been included in the index calculation.

"Currently, bids for Indian-origin pellets are even heard as low as $120-125/t, CFR", informed a trader.

Meanwhile, state-owned KIOCL has floated a tender for export of 50,000 t of pellets (Fe64%). The due date for bid submission is 4 Apr'23.

India's iron ore pellet export shipments were recorded at 6.26 mnt in the financial year 2023 (FY23) in comparison with 11.17 mnt in FY22, as per vessel line-up data maintained with SteelMint.

Rationale

• No deal was recorded this week and, thus, given 0% weightage in index calculation. Click here for the methodology.
  
  
• Six (6) indicative offers and bids were received, and all were considered for calculation of the index, given 100% weightage.
  
  

Market highlights-

• Domestic market realisations still better: Domestic pellet (Fe 63%) prices stood at INR 9,400-9,600/t loaded on to wagon for Barbil, eastern India. On the other hand, SteelMint's pellet export prices ex-plant for the Barbil region dropped further to INR 7,300-7,400/t this week.
  
  
• Global iron ore prices down w-o-w: The benchmark Fe 62% fines index dropped by $2.6/t on 4 Apr'23 to $121.1/t CFR China as against $123.7/t, a week ago. Spot prices of iron ore Fe 62% fines dipped w-o-w despite a recovery in seaborne liquidity. Few deals for medium-grade fines were concluded in the seaborne market due to being cost-effective. With the fall in futures, the import margin has resurfaced.
  
  
• Port inventories in China improve: Pellet inventory in China's major ports stood at 7.2 mnt this week, up against 7 mnt a week ago.