Indian export offers for iron ore pellets have resumed their consolidation at higher levels during the past week, with Chinese steel mills again restocking and also supported by most Indian producers running out of allocation for end-of-December shipments and contracting for end-of-January or early February deliveries, SteelOrbis has been informed on Friday, December 13.
According to traders, lower grade iron ore pellets with alumina content of two percent or higher are also back in focus among buyers as more volumes have been available from exporters for prompt delivery and buyers expecting a further price increase in January have been keen for early closing of contracts.
High grade iron ore pellet offers have firmed up to $113-117/mt CFR compared to $110-115/mt CFR in the previous week. Lower grade iron ore pellets too were back in focus among buyers and gained ground to $106-107/mt CFR compared to $101-103/mt CFR during the previous week.
The sources said that Brahmani River Pellets Limited (BRPL) successfully sold a 50,000 mt cargo for January delivery $114/mt CFR China, while Reshmi Group reportedly concluded a trade for January delivery at $113/mt CFR.
Jindal Steel and Power Limited (JSPL) was able to confirm a booking at $111/mt CFR for early January delivery for low grade pellets, with sources pointing out that this contract price was significantly higher than average offers for lower grade material because buyers were keen for early shipment and delivery, which was assured by the producer.
The few trades of lower grade iron ore pellets at higher-than-average offers indicated a rush among buyers to get early deliveries and the anticipation that Indian pellet offers will continue to rally over the next several weeks as Indian steel mills start to shift to pellets in view of the imminent domestic shortage of high grade lumps, the sources added.
“Both demand and supply-side dynamics are extremely positive for Indian pellet exports. Chinese steel mills are restocking even during the slack winter months to be ahead of the rising price curve. On the supply side, Indian steel mills are showing emerging signs of shifting to pellets to feed their blast furnaces, and production of high grade iron ore lumps is expected to fall steadily with several mining leases of merchant iron ore mines slated to expire on March 31 next year,” a member of the Pellet Manufacturers’ Association of India (PMAI) said.