Indian iron ore pellet offers range-bound ahead of Chinese holiday, buyers wait for market to bottom out

Friday, 27 September 2019 14:19:52 (GMT+3)   |   Kolkata

Indian iron ore pellet export offers have remained range-bound during the past week with buyers staying away from booking significant volumes in view of the Chinese holidays ahead and expectations that supplies will push offers down further, traders said on Friday, September 27.

The export market has remained muted in the past week with offers ranging at $104-106/mt CFR China, almost unchanged over the week. However, high grade pellets with alumina content of two percent and lower have been a shade higher and most of the transactions reported during the past week were for higher grade pellets.

The sources said that Jindal Steel and Power Limited (JSPL) has been able to conclude transactions at offers ranging at $106-107/mt CFR China. Brahmani River Pellets Limited (BRPL) is reported to have concluded contracts at higher levels of $109-111/mt CFR China for grades with alumina content less than two percent. Both these contracts were for end-October deliveries.

At least two traders said that most buyers are awaiting for signals as to how restrictions on use of fines and sintering are imposed gradually across Chinese steel mills and their impact on raw materials before making overseas bookings.

“Pellet offers are on a downtrend and most buyers feel that they are yet to bottom out and hence are deferring large-volume bookings,” a member of the Pellet Manufacturers’ Association of India (PMAI) said.

“Brazilian miner Vale has also transacted increased export volumes for October-November deliveries. This will put Indian offers under fresh pressures and the bulk of Brazilian pellets are of higher grade compared to Indian raw material and would get higher preference from buyers,” he added.

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