News Room - Steel Industry

Posted on 26 Feb 2021

Indian pellet export market regains momentum on fresh buying interest from China

• Deals of around 275,000t pellets concluded from India in a week’s time
• China’s Tangshan to tighten production curbs from end-Feb
• Freight rates from India to China have risen by $8 in the last two weeks

SteelMint’s weekly pellet export index (FOB east coast India) for Fe 64% grade has decreased by $4/t w-o-w to $180/t. India’s pellet export market market continues to remain active post the end of CNY holidays with a flurry of deals getting concluded. Confirmed Indian pellet export trades of around 275,000 t were recorded by SteelMint. The deals were concluded by eastern & central India based players in last one week and were concluded for China.

On-going pellet export tenders:

1. Southern India-based pellet maker – KIOCL has recently floated two tenders for pellet sales in the domestic and export market. Offered quantity for each tender is about 50,000 t pellet (Fe 63%). The due date for both the tenders is 25th Feb’21. Its last export tender held in 1st week of Feb’21 was concluded at $190/t FoB.

2. Also, a west Bengal and Odisha based pellet makers were heard to have floated export tenders today.

Indian pellet market has depicted an increase in pellet export shipments amid rising buying by Chinese mills and subdued domestic sales. Indian pellet export market is expected to remain supportive amid the announcement of strict pollution control measures on local authorities of Tangshan in order to improve air quality. These measures are likely to be implemented from end-Feb’21 onwards.

Rationale: Total five pellet export deals were concluded in this publishing window. Out of total, only three were taken into consideration for price calculation as T1 inputs and given a weightage of 50%. One of the deal was excluded because it was likely to be shipped by Southern India based ports and another deal was concluded for low alumina pellets.

Apart from trades, SteelMint has also received nine (9) indicative prices, offers and bids (T2) out of which two offers were excluded. The offers were given a weightage of 50%.

•  Spot iron ore fines price stable w-o-w– Spot iron ore fines Fe 62% price stood majorly stable w-o-w. The prices witnessed at $172.75/t yesterday as against $ 172.2/t last weekend. However, the prices dropped on d-o-d basis against $175.6/t, cfr china assessed on 22nd Feb.
• Freight rates increase – Freight rates for 50,000-55,000t export vessels from east coast India (Paradip) to China have increased by $2 w-o-w to $21-22.
• Pellet inventories at Chinese ports increase – Pellet inventory at major Chinese ports have increased to 6.2 mn t against 5.6 mn t a week before as per data maintained by SteelHome. On a monthly basis, inventories have picked up by 0.3 mn t against 5.9 mn t a month before.

Domestic pellet prices in eastern India inch down– Indicative prices from Barbil have come down on weekly basis. SteelMint’s pellet price assessment from Barbil recorded at INR 11,000/t as against INR 11,000-11,400/t (loaded to wagon) last week.

Source:SteelMint