SteelMint: India pellet export index falls $4/t w-o-w amid Chinese holidays

SteelMint's India pellet (Fe 63%, 3% Al) export index FOB east coast was recorded at $96/tonne (t), down by $4/t w-o-w, as the export market has remained inactive due to the Labour Day holidays in China. Thus, trade was muted. Indian pellet players are currently holding back offers for exports and, thus, there are very less offers in the market.

Just one deal was heard in the past week. However, an eastern India-based pellet producer concluded a 25,000-t pellet export deal to a South East Asian country towards the end of last week, as per sources.

Chinese mills are holding enough inventory of finished steel followed by weak demand which have led the steel mills to cut production. They are least interested in seaborne activity in the current market. However, market participants are optimistic that demand will revive once buyers return in the next couple of days post-Labour Day holidays.

Rationale

• One deal was recorded this week for a Southeast Asia country but not considered, thus, given 0% weightage in index calculation.
  
  
• Seven (7) indicative offers and bids were received, and six (6) were considered for calculation of the index, and given 100% weightage.
  
  

Pellet export shipments at Indian ports rise

India's pellet export shipments were recorded at 225,320 tonnes in the last week of April in comparison with around 170,500 t in the third week of last month, as per vessel line-up data maintained with SteelMint.

Market highlights

• Domestic market realisations better than exports: Domestic pellet (Fe 63%) prices stood at INR 8,700/t loaded on to wagon for Barbil, eastern India. On the other hand, SteelMint's pellet export ex-plant price realization for the Barbil region dropped further by INR 200/t w-o-w to INR 6,000/t this week, turning exports dull.
  
  
• Global iron ore prices edge up w-o-w: The benchmark Fe 62% fines index increased by $2.05/t w-o-w to $106.4/t CFR China on 2 May as against $104.35/t, a week ago. Chinese market participants were away for the Labour Day holidays, and there was silence in trading amid limited seaborne activity.
  
  
• Pellet port inventories in China stable: Pellet inventory at China's major ports stood at 7.1 mnt on 27 April 2023, and remained largely stable w-o-w.
  
  

Outlook

Currently, Indian pellet manufacturers are getting better realisations in the domestic market while there is the issue of price disparity between buyers and sellers in exports.

With the Chinese players expected to be back in the market this week after the holidays, concommintantly, the pellet export market may get some support.