Pellet Inquiries from China Remain Dull as Mills Prefer Low Grade Ore
According to the market participants report to SteelMint, Chinese mills continue to prefer low-grade iron ore which in turn kept inquiries for Indian pellets on the lower side. Even pellet port stocks in China have registered an increase in the last couple of weeks.
As per the data published by Steel Home, port stock in China’s major ports for iron ore hit its almost six months high. Currently Iron ore at the port side at 147.65 MnT. Similar level of iron ore inventory at the port side was seen at the end of Sept’18. Pellet inventory also increased to around 4.9 MnT.
Although no firm bids/offers were heard, but currently SteelMint’s assessment for India pellet export stands at around USD 116-117/MT, CFR China.
Discount on low-grade iron ore fines narrows down - Post Vale dam mishap, iron ore supply in the global market is expected to tighten affecting about 70 MnT of iron ore and 11 MnT pellet resulted sharp hike in global iron ore prices. At the same time discount on low-grade SSF (super special fines) declined from the previous month 33% to 16% in March’19.
Amid shrinking steel margins, Chinese mills are seen to prefer low-grade iron ore over high grade. Besides, Chinese imports for the month are expected to be on lower side due to sufficient inventories maintained by the mills.
Prior to this, only 2 export deals from India were reported of KIOCL at around USD 116.5/MT, FoB India. As per sources, the cargo is booked for non-Chinese origin.
Indian pellet exports fell 20% in Feb’19-: Indian pellet exports for the month of Feb'19 witnessed a decrease of 20% M-o-M to 0.81 MnT, as against 1.02 MnT a month before in Jan’19. KIOCL exported 0.17 MnT (Up 20%) in the month of Feb’19.
source: SteelMint
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