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SteelMint: India pellet export index rises by $12/t w-o-w on increased iron ore prices

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Pellets

BigMint Bureau

627 Reads

7 Jun 2023, 19:58 IST

SteelMint: India pellet export index rises by $12/t w-o-w on increased iron ore prices

SteelMint's India pellet (Fe 63%, 3% Al) export index FOB east coast rose by $12/t w-o-w to $106/tonne (t) on 7 June, 2023 amid increasing futures and spot iron ore prices in China.

Iron ore futures prices on the Dalian Commodity Exchange (DCE) for October 2023 delivery contract moved up by RMB 88/t ($11/t) to RMB 770/t in the last two weeks. Alongside, global iron ore fines (Fe 62%) prices also increased by $7.5/t to $109.9/t CFR China over the same period.

The gap between pellet export realisation and the Indian domestic prices has decreased to INR 1,400-1,500/t but prices are still not much viable for exports. As a result, no deals were seen this week.

Pellet export shipments stable w-o-w

India's pellet export shipments were recorded at 55,000 t in the first week of June, stable compared to the last week of May, as per vessel line-up data maintained with SteelMint.

Rationale

No deal was recorded this week and thus given 0% weightage in the index calculation.

Nine (9) indicative offers and bids were received, and seven (7) were considered for calculation of the index, and given a 100% weightage.

Market highlights-

Export realisations lower than domestic: Domestic pellet (Fe 63%) prices stood at INR 7,900-8,000/t loaded on to wagon for Barbil, eastern India. On the other hand, SteelMint's pellet export ex-plant price realisation for the Barbil region increased to INR 6,400-6,500/t this week.

Global iron ore prices climb w-o-w: The benchmark Fe 62% fines index moved up by $7.25/t w-o-w to $109.9/t CFR China on 6 June as against $102.65/t a week ago. Prices rose on increased trade activity in the seaborne market and strong demand from Chinese steel mills as import margins continue to improve.

China pellet port inventories stable: Pellet inventories at China's major ports stood at 7.25 mnt on 1 June, stable w-o-w.

Outlook

Despite an improvement in Chinese demand, the pellet export movement from India is expected to remain sluggish as market participants are skeptical about the sustainability of high-grade material demand as well as higher iron ore prices in China.