SteelMint: India's pellets export index edges up, trade activities yet to improve

India's pellets export trade has slightly improved against last week. SteelMint's India pellets (Fe 63%, 3% Al) export index, FOB east coast, recorded at $109/t, up by $1/t w-o-w.

India's pellets export shipments were recorded at 0.33 mnt in the third week of December, 2022 in comparison to 0.38 mnt in the previous week, according to vessel line up data maintained with SteelMint. Export activities have improved post-removal of export duty.

The market is not very active at the moment as physical trades are limited despite the hike in iron ore futures. However, a couple of eastern India-based players floated export tenders today whose outcome stands awaited till the time of publishing this report.

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.
  
  
• Ten (10) indicative offers and bids were received and out of which eight (8) were considered for calculation of the index and given 100% weightage.
  
  

Ongoing tenders:

• State-owned KIOCL has floated a retender for pellets (Fe63%, 8% SiO2+Al2O3). The due date for the tender is 28-29 December, 2022 and it has been floated only for empanelled customers.
  
  

Market highlights

• Domestic pellets realisations : As per SteelMint's analysis, domestic pellets (Fe 63%, 3% Al) offers are at INR 8,400/t ($101.5/t) loaded on to wagon for Barbil, eastern India. On the other hand, SteelMint's pellets export prices on ex-plant for the Barbil region improved to around INR 7,100-7,200/t ($86-87/t).
  
  
• Global iron ore prices rise on bullish outlook: The benchmark Fe 62% fines index up by $4.15/t w-o-w on 27 December to $114.65/t CFR China as against $110.5/t, a week ago. The spot prices of iron ore in China increased on the positive market outlook, especially after government's announcement of reducing Covid-19 control measures.
  
  
• DCE iron ore futures up w-o-w: Iron ore futures on the Dalian Commodity Exchange (DCE) for May contract closed on 28 December, 2022 (at 3 pm) at RMB 838.5/t, up RMB 9.5/t ($1/t) as against RMB 829/t on 21 December, 2022. Prices moved up by around RMB 2.5/t d-o-d.
  
  
• Port inventories in China edge down w-o-w: Pellets inventory in China's major ports stood at 5.5 mnt this week against 5.6 mnt a week ago.