Indian iron ore export prices have continued to soften during the past week amid limited trades and market reports of at least one contract cancellation citing force majeure and higher availability of pellets in India, SteelOrbis has been informed on Friday, March 20.
Market sources said that the Indian pellet export price quoted by a local producer has ranged $116-117/mt CFR China, compared to levels of $117-118/mt CFR in the previous week.
At least one contract concluded early this month has been cancelled by a Chinese buyer citing a force majeure clause, impacting sentiments.
Traders said that strong pellet prices in the local Indian market which had been providing support for export prices have also collapsed significantly, with domestic steel mills which were active buyers reducing their restocking of raw materials as several are considering production cuts in the face of weakening demand for finished steel.
The traders said that iron ore pellet price margins from local sales average around $100-105/mt excluding all taxes and levies in rupee terms, compared to highs of $119-120/mt early in the month.
Amid negligible trades during the past week, Reshmi Group has concluded an export contract for end-of-April delivery for an estimated volume of 35,000 mt at the lower end of the range at $115.50/mt CFR China.
“Indian iron ore pellet shipments to China during February 2020 were down 42 percent over the corresponding month of the previous year, indicating that Chinese steel mills were not restocking raw materials and the trend is expected to continue. Excess production, particularly by local pellet producers based around Raipur in the central state of Chhattisgarh, will continue to put fresh pressures on export and local prices in the weeks ahead,” a member of the Pellet Manufacturers’ Association of India (PMAI) said.