India: Pellet export index remains stable w-o-w amid fresh trades

• Export deals concluded by Indian producers this week
  
  
• Domestic-export realization gap inches down w-o-w
  
  

India's pellet export market remained largely stable over the past week, as assessed on 15 April, with active participation from exporters amid mixed global cues and subdued demand from China.

Prices and trade update

BigMint's India pellet (Fe 63%, 3-3.5% Al) export index remained stable w-o-w at $101/t FOB east coast on 15 April.

A key transaction was reported from an east coast-based pellet producer, which concluded a deal for 75,000 t of Fe 62.5 grade pellet at around $116-117/t CFR China. This indicates that while deals are still being executed, pricing remains under pressure due to cautious buying sentiment. However, confirmation from the seller for this deal is awaited.

Another exporter floated an offer for low-alumina pellets (1.5-1.8% alumina, Fe 63%) at $119/t FOB; however, the tender is yet to receive firm bids and remains unsold, reflecting resistance from buyers at higher price levels.

Meanwhile, a central India-based supplier recently concluded a pellet export deal at around $135/t CFR China for Fe 64% grade last week.

Market updates

Market participants highlighted that export activity is currently concentrated among only 3-4 pellet producers, who are actively exploring opportunities in the seaborne market. A market participant sad, "Only a handful of players are testing the export market right now. The rest are more inclined towards domestic sales, where realizations are comparatively better."

Indeed, inland pellet manufacturers are witnessing stronger price realizations in the domestic market, making exports less attractive. Higher logistics costs in export and relatively weaker international prices have further reduced export viability for these players.

On the global front, uncertainty continues to weigh on sentiment. International traders noted that ongoing geopolitical tensions have led to price volatility, prompting buyers to adopt a cautious approach. "There is a clear mismatch between buyer bids and seller expectations. While exporters are holding offers, buyers are not aggressive," an international trader commented.

Chinese demand remains sluggish as high port inventories in China have limited fresh procurement interest. Additionally, Chinese mills are reportedly sourcing higher-grade, low-alumina pellets at more competitive prices from other origins, making Indian material less attractive.

However, there are some positive developments. The resolution of the Australian miner-CMRG issue has provided some relief to the Chinese market, potentially stabilizing supply concerns in the near term.

According to reports, iron ore prices have dropped due to developments in the negotiations between BHP and CMRG, which resulted in the lifting of previously imposed restrictions. The market is expected to experience significant price adjustments across all five brands in the medium-grade segment, driven by anticipated Australian supplies.

An international trader said, "This news could bring benefits, but we may still adopt a cautious approach as restrictions have not yet been lifted on the Chinese port side. Mills are carefully monitoring the changes to import margins at this time. This situation has kept pellet prices range-bound, along with the ease in medium-grade iron ore supplies in China."

Looking ahead, exporters remain cautiously optimistic. A prominent pellet producer said, "We may see a few more tenders in the coming weeks as exporters try to capitalize on any price recovery."

Domestic vs export market

Export realizations (Fe 63%) were recorded at INR 7,275/t on 15 April, reflecting a stability w-o-w. In contrast, domestic realizations (Fe 62.5%) fell by INR 250/t w-o-w to INR 8,650/t exw. As a result, the spread between domestic and export prices stood at INR 1,400/t ($16/t), narrowing by INR 250/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.
  
  
• Twelve (12) indicative prices were received, and ten (10) were considered for the calculation of the index and given a balance 100% weightage.
  
  

Factors impacting pellet exports

Chinese iron ore fines prices fall w-o-w: The benchmark iron ore fines Fe 61% index fell by $3/t w-o-w to $105/dmt CFR China on 14 April. Prices fell as procurement curbs eased following talks between an Australian miner and CMRG, with the market expecting price corrections across medium-grade Australian fines amid an improved supply outlook. However, mills remained cautious, adopting a wait-and-watch stance due to ongoing portside restrictions and uncertainty over import margins.

DCE iron ore futures prices stable d-o-d: Iron ore futures on the Dalian Commodity Exchange (DCE) for the September 2026 contract closed at RMB 759/t ($119/t) on 8 April, and remained largely stable d-o-d.

Vessel freights inch down w-o-w: Iron ore freights dropped by $0.3/dmt w-o-w to $14.7/dmt on 14 April. From India to China, Supramax rates on the Paradip-Qingdao route edged down, reflecting limited enquiry levels and cautious buying sentiment amid prevailing market uncertainty. Activity remained subdued, with charterers holding back from aggressive fixtures.

Outlook

Pellet export prices are likely to see continued volatility in the near term. A sustained recovery in export volumes will rely on improved demand from China and a better alignment between buyers' and sellers' price expectations.