SteelMint's India pellet export index edges close to five-month low

India's pellet export market witnessed limited trade in the last one week due to bid-offer disparities. SteelMint's India pellet (Fe 63%, 3% Al) export index, FOB east coast, decreased by $5/t w-o-w to $129/t on 18 May, 2022 from $134/t on 11 May. The index has almost touched a five-month low.

Rationale

• No deals were reported this week and hence were not taken for price calculation under T1 trade and given 50% weightage in index calculation. Click here for methodology.
  
  
• Nine (09) indicative offers and bids were received out of which eight (08) were considered for calculation of the index and given 50% weightage.
  
  

An Indian player floated an export tender for 50,000 t of pellets (62.5% Fe, 8% SiO2+Al2O3). The due date for the tender was 19 May'22 and it has been floated only for the company's empanelled customers.

"Indian players have been trying to get prices of around $150-155/t CFR China levels, but bids are not in line with the expectations. Workable price indications stand at $140-145/t CFR China," highlighted a source.

"We are not offering as realizations in exports have fallen quite a bit," commented an eastern India-based pellet maker.

Market highlights

• Realizations in the domestic market better than exports - As per SteelMint analysis, pellet (Fe 64%, 3% Al) exports ex-plant realization is assessed at INR 8,500/t for Barbil, eastern India. On the other hand, SteelMint's domestic price assessment for the Barbil region remains stable at INR 9,500/t loaded to wagon. Thus, the realization in exports is much lower than in domestic.
  
  
• Global iron ore price inch up w-o-w as demand for medium-grade fines remains strong: The benchmark Fe 62% fines index inched up by $2.15/t w-o-w on 17 May to $130.15/t CFR China. Seaborne iron ore prices increased as demand for medium-grade fines remained strong.
  
  
• DCE iron ore futures down w-o-w: Iron ore futures on the Dalian Commodity Exchange (DCE) for September contract closed on 18 May, 2022 (at 3 pm) at RMB 791/t, down RMB 30/t ($4/t) as against RMB 821/t on 11 May, 2022. On a daily basis, prices decreased by around RMB 38/t ($6/t).
  
  
• Port inventories in China decrease w-o-w: Pellet inventory at China's major ports decreased to 4.65 mnt this week against 4.9 mnt a week ago.