Indian iron ore pellet export offers soften in line with domestic trends but Chinese buyers largely absent

Monday, 26 August 2019 16:20:21 (GMT+3)   |   Kolkata
       

India’s iron ore pellet export activity has remained largely quiet during the past week despite the sharp softening of offers in line with the fall in domestic prices, with Chinese buyers staying on the sidelines, traders said on Monday, August 26.

According to market sources, Indian pellet offers have been lowered by $10/mt during the past week to the range of $112-115/mt CFR China in line with domestic pellet manufacturers like NMDC Limited and some pellet producers in the central region around Raipur lowering their local sales prices by INR 500/mt ($7/mt). Pellet producers in the eastern region have lowered domestic sales prices by INR 300/mt ($4/mt).

“Traders representing Chinese steel mills are almost completely absent from the market. Reports received in India indicate that Chinese steel mills are back to preferring high grade iron ore lumps as uncertainties over supplies from Brazil and Australia have eased somewhat and hence buyers are shunning any bookings of Indian pellets which normally come with a combined silica and alumina content of around seven percent,” a member of the Pellet Manufacturers’ Association of India (PMAI) said.

Indian exporters have adjusted their export offers in line with the fall in domestic prices and the softening of the Indian rupee which touched the INR 72 per dollar mark. But Chinese buyers are not seen to be responding. “However, local exporters are banking on revived demand for Indian pellets before the onset of the winter months. It is expected that the Chinese government will impose stricter environmental norms ahead of winter, prompting at lease coastal-based steel plants to lower off-take of low grade iron ore lumps and fines and to shift to pellets, triggering a demand uptick for Indian material,” the PMAI official added.

Market sources said that a central India-based pellet producer has been successful in concluding a 10,000 mt contract for September delivery to Malaysia, but the contracted price was not readily available in the market.

$1 = INR 72.02

 


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