SteelMint: Indian pellet export index falls by $27/t w-o-w following decline in Chinese futures
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Bids for Indian pellet exports have dropped sharply this week owing to sharp decline in Chinese iron ore & steel futures. SteelMint's Indian pellet export index (Fe 64% 3% Al, FoB east coast) has recorded a sharp drop of around $27/t w-o-w and stands at $216/t on uncertain market outlook amid a plunge in Chinese iron ore and steel futures.
Dalian Commodity Exchange (DCE) iron ore futures fell by 4% (d-o-d) as steel prices extended declines. DCE iron ore futures Sep'21 contract closed at RMB 1,192.5/t ($185) (-RMB 50). Following this, spot iron ore fines index are heard to have fallen by $8 d-o-d.
"There are very limited offers in the market currently and pellet makers are expected to offer next week once prices stabilise. Trades in domestic pellet market have also remained dull after pellet makers raised offers last week", a trader reported to SteelMint.
Indian pellet makers are still eyeing $270-275/t CFR China but the bids have fallen sharply, sources highlighted.
Rationale:
- No pellet export deals were concluded in this publishing window therefore not considered for price calculation as T1 inputs and given the weightage of 0% in this index.
- Apart from trades, SteelMint has also received Eight (08) indicative prices, offers and six (06) were considered as T2 trades and given a weightage of 100% in this index.
Key market highlights-
Chinese spot iron ore fines prices down w-o-w- Chinese spot iron ore fines index moved down by $9/t to $223.75/t CFR China yesterday against $233.1/t CFR China assessed last week.
Freight rates remain unchanged- Freight rates for 50,000-55,000t export vessels from east coast India (Paradip) to China stand the same like last week around $ 24-25/t. However, vessel availability is an issue due to COVID concerns on Indian cargoes.
Pellet inventories at Chinese ports continue to fall - Pellet inventory at major Chinese ports moved down to 3.8 mn t last week against 3.9 mn t the previous week as per data maintained by SteelHome.
Domestic pellet index fell marginally - SteelMint's bi-weekly domestic pellet index "PELLEX " decreased by INR 100/t to INR 17,200/t DAP Raipur on 18th May'21 due to bid-offer disparity.