Will Softening Global Iron ore Prices Lower Indian Pellet Export Offers?

Spot iron ore prices in China have observed downtrend this week. Fe 62% fines index which closed at USD 95.8/MT, CFR China on 12th Apr'19 fell and stood at USD 92.5/MT, CFR China yesterday.

Thus a fall of 4% is evident. SteelMint in conversation with major Indian pellet makers learned that they are eyeing for levels of USD 119-120/MT, CFR China and they had offered cargoes for pellet export earlier this week.

However, as per participants, no firm deals were reported so far. If participants are to be believed, traders are actively taking positions as of now, however, Chinese mills are not active in the market at this moment. Few participants reported pellet stock at China's Caofeidian around RMB 950/MT. It seems that Indian pellet makers are in 'wait & watch' mode to receive bids from overseas participants to get the clear picture.

Last week Brahmani River Pellets (BRPL) had concluded pellet export deal to China for 60,000 MT pellets with Fe 64% and 3% Al at around USD 106-107/MT, FoB for April shipment. In other pellet export deal Central India based pellet maker concluded two pellet export deals of 50,000 MT each at USD 106/MT, FoB.

Southern India based pellet maker - KIOCL also concluded pellet export deal last week, the tender was offering 50,000 MT pellet consists of Fe 64% content with 1.4% Al at around USD 114/MT, FoB India.

Indian pellet exports remain stable in FY'19-: According to data maintained with SteelMint, Indian pellet export volumes have remained majorly stable on yearly basis. Pellet export volumes were registered at 9.22 MnT in FY'19 against 8.96 MnT in FY'18.