Indian iron ore pellet export prices have staged a strong surge over the past week, touching the $200/mt mark on the back of continuing steel price increases in China, SteelOrbis has learned from trade and industry circles on Friday, March 5.
Market sources said that ex-India pellet prices have gained a hefty $10-12/mt over the past week to a range of $201-208/mt CFR China on anticipation of further gains in finished steel prices across key global markets and active raw material restocking by Chinese steel mills.
However, the outlook of pellet exports from India became cloudy with the recent news that seven blast furnaces will have to stop operations in Tangshan by March 10. Nevertheless, some local Indian pellet producers and exporters have been tending to look for the silver lining to the curbs on industrial activity in Tangshan, with some even maintaining that it would support iron ore prices as the steel market will remain strong.
A number of iron ore miners and pellet producers are seen to be interpreting the Tangshan administration’s move as “institutionalization and extension of winter restrictions on sintering, which would trigger sustained higher demand for concentrates and pellets through the year.”
“The details from China are still sketchy and there is a lot of speculation of its impact on Indian exporters, both bearish and bullish. Raw material prices are at a decade-high and developments in China will set a new direction in the market once there is clarity. But until such time, we expect pellet prices to remain robust largely on the very positive outlook on steel prices,” a member of the Pellet Manufacturers’ Association of India (PMAI) said.
Sources said that a pellet-producing arm of Godvari Ispat and Power Limited (GIPL) concluded a trade for 35,000 mt of pellet for end-of-April delivery at a price of around $201-204/mt CFR China.
An affiliate of Essel Mining reported a trade of 45,000 mt for May delivery at a price of $206-208/mt CFR China for high grade material with alumina content less than two to three percent.
The Odisha-based pellet plant of Jindal Steel and Power Limited has reportedly concluded a trade of 40,000 mt for May delivery at a price of around $203-205/mt CFR China, the sources said.