SteelMint: India pellet export index falls marginally on less firm bids

A steep fall in spot iron ore prices in China amidst the decline in futures prices have weighed down Indian pellet export prices. SteelMint's India pellet (Fe 63%, 3% Al) export index (FOB east coast) stands at $153/t.

Not many traders and Chinese buyers were active in the market in the last one week, sources said. However, a couple of eastern India-based players floated export tenders whose outcome could not be received till the time of publishing this report.

Rationale

• No deal was reported so far this week, hence, not taken into price calculation under T1 trade and given no weightage in index calculation, Click here for methodology.
  
  
• Seven (07) indicative offers and bids were received, and six (06) were considered for calculation of the index, given 100% weightage.
  
  

Market highlights -

• Fall in pellet export vessel line up at Indian ports: The pellet export vessel line-up at Indian ports stood at 192,000 t for the week ending 19 Feb'22, down against 260,000 t in the previous week, as per data maintained with SteelMint.
  
  
• Domestic pellet trades in India slow down: Pellet prices in India decreased on weak demand as steel mills were not active in procurement with both traders and mills holding a wait-and-watch stance, sources said. This was due to the decline in sponge iron prices seen since the closing of last week. SteelMint's assessment for pellet prices in the Barbil region of Odisha stood at INR 11,500/t ($154) loaded on to wagon.
  
  
• Global iron ore prices fall w-o-w: The benchmark Fe 62% fines index fell by $2.25/t on 22 Feb'22 to $136.75/t CFR China as market participants held a wait-and-watch stance as they awaited further clarity in the market. With Chinese government's intervention, high-grade ore fines demand slightly cooled off.
  
  
• DCE iron ore futures fall w-o-w: Iron ore futures on the Dalian Commodity Exchange (DCE) for May contract closed today at RMB 700/t, up RMB 15.5/t ($2/t) d-o-d. However, it is still down by around RMB 20/t ($3/t) w-o-w.
  
  
• Port inventories in China increase w-o-w: Pellet inventory at China's major ports was recorded at 4.6 mnt this week as against 4.35 mnt a week ago.