Indian iron ore pellets export offers have continued to remain at higher levels with an increase in the number of deals concluded during the past week as environmental restrictions on Chinese steel mills kicked in and with more steel mills moving to direct charging of raw materials instead of sintering, as SteelOrbis has been informed.
Market sources said that, while most deals have been concluded in the range of $108-110/mt CFR China for November delivery, at least one deal has been concluded at the significantly higher level of $115/mt CFR China for pellets with alumina content of less than two percent.
The sources, however, said that two deals concluded for late December delivery were, however, at a lower level of around $106-107/mt CFR China, with traders attributing the lower offer to some Chinese steel mills reducing steel production during the winter months, which could depress overall Indian offers over the next two months.
According to the sources, KIOCL (formerly Kudremukh Iron Ore Company Limited) has concluded a contract for November delivery at $115/mt CFR China for pellets with alumina content less than two percent.
Brahmani River Pellets Limited (BRPL) has sold a lot for November delivery at $108/mt CFR China, while a shipment for November delivery has been concluded by Jindal Steel and Power Limited (JSPL) at $109/mt CFR China, the sources said.
“The Indian iron ore pellet export market is holding up. But the outlook is uncertain. While winter production cuts by Chinese steel mills can be expected to dampen demand and offer levels, reports of Vale significantly increasing shipments in November can also be expected to put supply-side pressures on Indian offers,” a member of the Pellet Manufacturers’ Association of India (PMAI) said.