SteelMint: India's pellet exports index falls to over two-month low in absence of firm bids

SteelMint's India pellet (Fe 63%, 3% Al) export index (FOB east coast) stands at $148/t, lower by $12/t w-o-w. The index has fallen to over two-month low as per data maintained with SteelMint. Chinese pellet buying interest weakened after a significant drop in global iron ore prices seen in the past two days.

Not many traders and Chinese buyers were active due to rising Covid cases, sources highlighted SteelMint.

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.
  
  
• Five (05) indicative offers, and bids were received, and four (04) were considered for calculation of the index, given 100% weightage.
  
  

"India's pellet export market has turned very subdued with no firm bids being heard from China and EU.", trade sources highlighted SteelMint.

Market highlights-

• Tangshan undergoes lockdown - A temporary city-wide lockdown is to be implemented in China's Tangshan in order to effectively curb the virus spread, sources said. The mills are facing difficulty in hauling their steel out of mills leading to increasing inventory. The independent rolling mills in Tangshan's Fengrun district virtually all stopped with no offers to market. Trade flow on the market is temporarily in a standstill. It may be noted that Tangshan, with an annual output of 160 million tonnes (mnt), accounts for 56% of total steel output in Hebei province and 13% of the country's total steel output.
  
  
• Global iron ore prices fall d-o-d: The benchmark Fe 62% fines index increased by $7.95/t w-o-w on 22 Mar'22 to $143.5/t CFR China, however on d-o-d basis prices fell by $4 amidst demand concerns on rising COVID cases, liquidity issues.
  
  
• DCE iron ore futures up: Iron ore futures on the Dalian Commodity Exchange (DCE) for May contract closed today (at 3 PM) at RMB 822.5/t, up RMB 23.5/t ($4/t) d-o-d. On a weekly basis, prices increased by around RMB 18.5/t ($3/t).
  
  
• Port inventories in China up w-o-w: Pellet inventory at China's major ports increased to 4.6 mnt this week against 4.5 mnt a week ago.