Indian iron ore pellet offers have remained at higher levels during the past week, but the number of deals concluded during the past week has declined amid cautious buying on apprehensions of lower demand from Chinese steel mills in anticipation of lower production during the winter months ahead.
Indian pellet export offers are still in the range of $108-110/mt CFR China with only limited deals concluded at these levels. However, unlike previous weeks, no deals have been reported in the market at higher levels of around $115/mt CFR for higher grade pellets with alumina content of two percent and less.
According to the market sources, Jindal SAW Limited concluded a deal for early December delivery at $108/mt CFR China. This was $2/mt lower than in a shipment completed last month.
At least one deal reported by Jindal Steel and Power Limited (JSPL) was concluded for early January delivery at the lower offer of $105/mt CFR China, indicating the market expectations of offers weakening during the peak winter months with Chinese steel mills lowering production and stricter sintering norms kicking in.
“Chinese demand for Indian iron ore pellets is entering uncertain months. Chinese steel mills have two options as more come under sintering restrictions - either lower production during the winter months or resort to higher imports of pellets. We are not sure which way the demand will go right now and hence Indian pellets offers are stagnating in the absence of buyers and short-term directions,” a member of India’s Pellet Manufacturers’ Association said.