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Indian pellet export index increases by $7/t, dip in futures weaken sentiments slightly

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Pellets

BigMint Bureau

888 Reads

23 Dec 2020, 19:03 IST

Indian pellet export index increases by $7/t, dip in futures weaken sentiments slightly

SteelMint's pellet export index (FOB east coast India) increased to $177/t, up by $7/t w-o-w. The factors that supported price hike were falling pellet inventory at Chinese ports and robust demand for high grade ore.

"We are offering pellets at $197/t CFR China for Fe 63% pellets mid-Jan laycan. Although, heard a few Indian pellet makers were even for $200/t CFR levels a few days back ", a participant from eastern India based pellet making company shared with SteelMint.

However, sharp decline in iron ore & steel futures, spot iron ore fines index in China from the last two days turned the market sentiments bearish.

Market participants highlighted that there are strong inquiries from Chinese mills but as the prices have been declining from the last few days, traders are waiting for clarity before finalizing any transactions.

Rationale: No pellet export deal (T1) heard so far in this week. Therefore, weightage of T1 transferred to calculation of T2 inputs.

SteelMint has received seven indicative prices (T2) and only six were taken into consideration with an average price of $177/t FOB India and given weightage of 100%.

Spot iron ore fines price increased by $6/t - Chinese spot iron ore fines (Fe 62%) increased by around $6/t on a weekly basis and stood at $ 163.05/t CFR China yesterday against $157.05/t a week before. However, in the last two days spot prices have down by around $14/t against $176.9/t CFR, China two days back. Today price stands at $163.05/t CFR, China.
Pellet inventories in Chinese ports fall further - Pellet inventory at major Chinese ports have been decreasing from the quiet few weeks. Last week, pellet inventories fell by around 0.1 mn t to 6.9 mn t against 7 mn t a week before as per data maintained by SteelHome. Similarly, on monthly basis inventories have come down by 1.6 mn t against 8.5 mn t a month before.
Domestic pellet price in eastern India rise- Indicative prices from Barbil have increased in the domestic market this week. SteelMint's pellet price assessment from Barbil (Odisha) stands at INR 11,500/t (Loaded to wagon) this week.
Gap between realization in domestic and export narrows down- Gap between pellet export realization and domestic offers have narrowed down this week and stands around INR 100-200/t, as per SteelMint's analysis. Thus, it seems that on increase in pellet export prices, inquiries have picked up.