SteelMint: India's pellet export index range-bound, buying interest slows down

SteelMint's India pellet (Fe 63%, 3% Al) export index FOB east coast was recorded at $118/t, stable w-o-w due to weak demand for pellets this week as also the overall downtrend seen in the market. According to market sources, the stability in iron ore prices globally and limited buying interest have kept the Indian pellet export trade muted.

The pellet export market is witnessing a downtrend, and sellers are in wait-and-watch mode till the scenario improves, sources added. Pellets demand is expected to pick up in the coming weeks if margins are favourable.

India's pellet export shipments were recorded at 130,000 t in the second week of February in comparison with 241,200 t in the previous week, according to the vessel line-up data maintained with SteelMint.

Rationale

• No deal was heard this week. But it was not taken for price calculation under T1 trade due to confirmation pending from officials and given 0% weightage in index calculation. Click here for methodology.
  
  
• Eight (8) indicative offers and bids were received, and seven (7) were considered for calculation of the index, given 100% weightage.
  
  

Market highlights

• Export realisations fall: As per SteelMint's analysis, domestic pellet (Fe 63%, 3% Al) assessement stood at INR 9,050/t ($109/t) loaded on to wagon for Barbil, eastern India. On the other hand, SteelMint's pellet export prices ex-plant for the Barbil region are down to around INR 7,900/t ($95/t).
  
  
• Global iron ore prices range bound: The benchmark Fe 62% fines index increased by $2.05/t w-o-w on 14 February to $123.75/t CFR China as against $121.7/t a week ago. Earlier this week, prices had fallen as the market's excessively bullish outlook earlier may have contributed to a drop in prices. The iron ore market will inevitably be under pressure as a result of the weak steel market performance.
  
  
• DCE iron ore futures edge up w-o-w: Iron ore futures on the Dalian Commodity Exchange (DCE) for May 2023 contract closed on 15 February (at 3 pm) at RMB 865.5/t, down RMB 17.5/t ($3/t) as against RMB 848/t on 8 February. Prices rose by around RMB 9/t ($1/t) d-o-d.
  
  
• Port inventories in China rise: Pellet inventory in China's major ports stood at 6.5 mnt this week against 6.2 mnt a week ago.