Indian iron ore pellet export prices overcame bearish sentiments early in the past week and buyers’ hesitancy to record strong gains, riding on the strengthening of futures prices and the supply tightness for high grade fines, prompting revived higher activity among Chinese buyers even at higher price levels, SteelOrbis learned from trade and industry circles on Friday, June 11.
The strong revival of buying has also enabled local sellers to push for an increase in prices in view of rising prices of fines and short supplies received by pellet plants from merchant miners, particularly in the Odisha region.
Ex-India pellet prices are at $230-240/mt CFR late this week, stable from last week’s level, but higher than the weak bids at $200-205/mt CFR early in the week. Moreover, deals at up to $250/mt CFR have also been heard for high grade pellets with alumina content of two percent and less.
“The strengthening of futures of course helped the market to get to a higher level. But more fundamental to the price rise have been reports of tight supplies of high grade fines’ arrivals in China. Our assessment is that supply-side considerations will provide further headroom for prices to consolidate at a higher level,” a member of the Pellet Manufacturers’ Association of India (PMAI) said.
“At the local level, merchant miners in Odisha are not only rampantly increasing prices of fines but also squeezing volumes to buyers. There is a lot of competition between local pellet producers and Odisha-based sponge iron producers for the limited volumes of fines available for merchant sales,” he added.
Sources said that Brahmani River Pellet Limited (BRPL) has reported a trade for 45,000 mt of high grade pellet with alumina content less than three percent at $245-250/mt CFR, up by $10/mt for a contract for the same grade material done last week.
A pellet producing arm of Essel Mining is heard to have concluded a deal for 35,000 mt at around $230-235/mt CFR, the sources said. An aggregating trader cum resource firm based in Odisha has reported a deal for 30,000-40,000 mt with a Singapore-based trading firm at a price of around $230-240/mt CFR, the sources added.