Indian iron ore pellet export offers bounce back on possible tighter sintering restrictions in China

Friday, 06 September 2019 14:04:04 (GMT+3)   |   Kolkata

Indian iron ore pellet export offers have trended upwards during the past week, with the overall transaction range moving up riding on the back of increased contracts concluded by Chinese buyers and expectations of restrictions on Chinese steel mills over the next few months, SteelOrbis is informed.

According to market sources, the overall offer range at which transactions are concluded has moved up during the past week to $107-113/mt CFR China compared to the range of $105-111/mt CFR China in the previous week.

“Chinese steel mills are expecting restrictions to be imposed on sintering of iron ore fines with the winter months approaching. This triggered the beginning of a shift from fines to pellets, leading to a higher number of contracts concluded by Indian iron ore pellet exporters,” a member of the Pellet Manufacturers’ Association of India (PMAI) said.

The sources said that Brahmani River Pellets Limited (BRPL) has concluded a contract during the past week at $110/mt CFR China for early October delivery with the sources adding that part of the premium was because of BRPL offer was for pellets with alumina content of less than two percent.  BRPL concluded a second contract at $109/mt CFR China for late October delivery, the sources said.

An Odisha-based private pellet producer has concluded a contract for October delivery at $107/mt CFR China, with the lower price in the deal being because the volume offered was with alumina content in a range of two to three percent, a sources said.

Indian government-run, KIOCL Limited (formerly Kudremukh Iron Ore Company Limited), is reported to have concluded a deal for early October delivery for a cargo of 50,000 mt of iron ore pellets from its plant in southern India, although the offer price could not be ascertained from the market.

“However, Indian exporters are keeping a close watch on Chinese lump prices which have been trending lower and this might prompt at least some mills to move towards high grade lumps from fines and not pellets once the government imposes sintering restrictions for pollution control reasons. If so, then pressures on Indian pellet offers could resurface,” the source stated. 

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