SteelMint: India's pellet export index stable but buyers yet to return after holidays

India's pellet export trades remain at a stable level compared to last week. SteelMint's India pellet (Fe 63%, 3% Al) export index, FOB east coast, was assessed at $109/t, stable w-o-w. With most of the buyers yet to return from the New Year holidays, the market has remained silent. However, last week, deals for 150,000 t of pellets were heard concluded.

India's pellet export shipments were recorded at 220,000 t in the fourth week of December 2022 in comparison with 380,000 t in the previous week, according to vessel line up data maintained with SteelMint. Export activities have improved post removal of export duty.

Demand for pellets has not yet improved despite efforts by China to open up its economy by relaxing pandemic-related restrictions, market participants said.

Rationale

• No deal was reported towards the end of last week and taken into price calculation under T1 trade and hence given 0% weightage in the index calculation. Click here for methodology.
  
  
• Six (06) indicative offers, and bids were received, and five (05) were considered for calculation of the index, given 50% weightage.
  
  

Market highlights

• Domestic realisations : As per SteelMint's analysis, domestic pellets (Fe 63%, 3% Al) offers are at INR 8,700/t ($105/t) loaded on to wagon for Barbil, eastern India. On the other hand, SteelMint's pellet export prices on ex-plant basis for the Barbil region improved to around INR 7,100-7,200/t ($86-87/t).
  
  
• Global iron ore prices remain stable: The benchmark Fe 62% fines index increased by $3/t w-o-w on 3 Jaunuary to $117.65/t CFR China as against $114.3/t a week ago. Spot prices of iron ore in China increased slightly as market participants expect more positive policy measures to boost the economy.
  
  
• DCE iron ore futures rise w-o-w: Iron ore futures on the Dalian Commodity Exchange (DCE) for May 2023 contract closed on 30 December, 2022 (at 3 pm) at RMB 863/t, up RMB 24.5/t ($4/t) as against RMB 838.5/t on 28 December. Prices rose by RMB 18/t ($3/t) d-o-d.
  
  
• Port inventories in China edge down w-o-w: Pellet inventory in China's major ports stood at 5.3 mnt this week against 5.5 mnt a week ago.