India: Pellet export index dips w-o-w ahead of Chinese Labour Day holidays

• Chinese buyers remain cautious, bid-offer disparities limit trade
  
  
• Benchmark iron ore fines prices dip amid improved spot supply
  
  

BigMint's India pellet (Fe 63%, 3-3.5% Al) export index inched down by $0.5/t w-o-w to $102.5/t FOB east coast on 29 April. Export market activity slowed during this publishing window, with no deals recorded in the last two weeks.

Ahead of Chinese Labour Day holidays (1-5 May), sentiment continued to weaken amid subdued demand from China. Market participants noted that the lack of firm inquiries resulted in minimal trading activity, with no major deals concluded during the assessment period.

Prices and trade update

In contrast, some activity was observed in the domestic market. A port-based pellet producer reportedly sold around 100,000 t of material (1.5-1.8% alumina, Fe 63-64%) to domestic buyers at INR 10,300-10,400/t ($109-110/t) FOB through coastal transactions. This indicates that while export avenues remain slow, domestic demand is providing partial support to producers.

A central India-based pellet producer recently offered a cargo of Fe 64% material to overseas buyers; however, the buyers' counterbids were lower than expected, resulting in the cargo remaining unsold.

Market updates

Buyers have largely stepped back from active procurement, preferring to wait for clearer post-holiday market direction. An international trader said, "The market is currently in a wait-and-watch mode. Chinese buyers are not actively placing bids due to the holiday slowdown."

Indian pellet exporters attempted to offer a few cargoes; however, weak counter-offers from buyers prevented the finalization of deals. Export offers for June laycan cargoes were heard at around $121/t CFR China, but buyers workable levels remained lower at approximately $117-118/t CFR China. Another international trader added, "There is a clear gap between seller expectations and buyer indications, which is restricting deal closures."

However, even the domestic market has shown signs of softening. Pellet prices have declined in recent weeks, reflecting weaker downstream demand. Buyers are currently procuring on a need-based basis, while producers are holding back from aggressive selling strategies. A pellet producer stated, "We are waiting for clearer signals from both domestic pellet demand and export markets before making any pricing decisions."

Odisha-based miners reduced prices for fines, leading to lower input costs for pellet producers. Prices across most regions moved lower following recent reductions in offers, reflecting weaker market sentiment.

Domestic vs export market

Export realizations (Fe 63%) were recorded at INR 7,550/t ($80/t) on 29 April, reflecting an improvement of INR 50/t ($0.5/t) w-o-w amid a wider spread between INR and USD currencies. In contrast, domestic realizations (Fe 62.5%) fell by INR 300/t ($3/t) w-o-w to INR 8,250/t ($87/t) exw. As a result, the spread between domestic and export prices stood at INR 700/t ($7/t), narrowing by INR 350/t ($3.5/t) w-o-w.

Rationale

• No confirmed deal from India's east coast was recorded in this publishing window for T1 trade, and, therefore, this category was allotted 0% weightage for today's price calculations. Click here for the detailed methodology.
  
  
• Eleven (11) indicative prices were received, and eight (8) were considered for the calculation of the index and given a balance 100% weightage.
  
  

Factors impacting pellet exports

Chinese iron ore fines prices edge down w-o-w: The benchmark iron ore fines Fe 61% index fell by $1/t w-o-w to $107/dmt CFR China on 28 April. Prices eased as earlier supply concerns over restricted portside cargoes subsided, allowing mills to resume trading and procurement of these cargoes upon meeting specified requirements. Port-stock prices also declined, amid expectations that previously restricted volumes would gradually re-enter the market and lift spot availability.

DCE iron ore futures prices remain firm w-o-w: Iron ore futures on the Dalian Commodity Exchange (DCE) for the September 2026 contract closed at RMB 783.5/t ($115/t) on 29 April, remaining largely firm w-o-w.

Vessel freights inch up w-o-w: Iron ore freights inched up w-o-w to $14.2/dmt on 28 April. From India to China, Supramax rates climbed up amid rising cargo volumes, whereas increasing spot tonnage kept charterers unhurried.

Outlook

BigMint expects the pellet export market to remain under pressure in the short term. The ongoing holiday lull in China is likely to keep activity subdued, and market participants expect potential downward price corrections once trading resumes after 5 May.