Jindal Steel’s Auction for 50,000 MT Pellet Export

India’s largest pellet exporter - Jindal Steel & Power (JSPL) has offered 50,000 WMT pellets for export via online auction. The auction is scheduled to take place today i.e. 29 Nov’17. The export shipment is for 10-20 Dec’17 laycan.

Another major Indian pellet exporter is looking to close export deal at around USD 117.5-118/MT, CFR China but the deal is yet to be concluded.

Indian pellet export offers fall amid resistance from Chinese steel mills - SteelMint export price assessment for Indian origin pellets has come down further his week. Current assessment stands a USD 116-117/MT, CFR China (equivalent to USD 106-107/MT, FoB) against last week’s assessment of USD 118-120/MT, CFR China.

Spot pellet premium for Fe 65% grade pellets had come down by USD 4.5/MT to USD 53.5/T, CFR China. Market participants are of the view that pellet premium may come down further this week amid subdued demand of imported pellets n China.

Chinese steel mills have resisted from importing pellets at a very high price. Factors that have put Indian pellet export offers under pressure are:

1. Rise in Pellet inventories at Chinese major ports - Pellet inventory at Chinese major ports have increased from 1.75 MnT in 1st week of Nov’17 to 1.9 MnT pellets in last week. Trade sources shared that steel mills are not actively using imported pellets resulting in increase in pellet inventories in turn pressurizing pellet offers.

2. Steel mills preference to iron ore concentrate - Chinese steel mills are finding it cheaper to make pellets out of concentrate rather than importing pellets. Iron ore concentrate price for Fe 66% is at around USD 88/MT, CFR China. Pellets price would stand at around USD 105-107/MT which is being preferred to Chinese steel mills.