Indian iron ore pellet export prices have recovered during the past week riding on the back of rising prices of higher grade fines in China, but the outlook has remained unclear amid concerns over the crude steel production fall in China, the resulting impact on raw material demand, and local exporters’ limitations as regards handling higher-volume bookings in view of the shortage of fines during the rainy season, SteelOrbis has learned from trade and industry circles on Friday, July 2.
Ex-India pellet prices have bounced back from the previous week’s weakness, gaining $7-10/mt to levels of $227-240/mt CFR China, largely riding on rising prices of high grade fines and the narrowing of the price differential with imported pellets.
Prices were also supported by the fall in volumes arriving at Chinese ports and by Indian pellet exporters declining to accept large-volume bookings in view of the shortages of fines available from merchant miners during the current monsoon season and logistical challenges of transportation, the sources said.
“Pellet export prices are recovering, but not at the expected pace, to offset the rising costs of fines in the local market and very tight supplies faced by pellet producers,” a member of the Pellet Manufacturers’ Association of India (PMAI) said.
“The target export price in the short term is around $250-270/mt CFR. Until then, low availability of fines and high prices will constrain local pellet plants to increase capacity utilization and increase volumes on offer for exports. Whether the target export price is possible is not clear unless steel prices in China consolidate and reports of crude steel production cuts are exaggerated,” he said.
Sources said that the pellet production arm of Godvari Ispat and Power Limited reported a deal for around 35,000 mt at around $230-240/mt CFR for August-September delivery.
Brahmani River Pellets Limited (BRPL) is heard to have concluded a trade for 30,000 mt at a price of around $240-245/mt CFR for high grade pellets with alumina content less than three percent, the sources added.