Indian iron ore pellet export prices have surged during the past week to a two-month high as producers have pushed up prices to maintain spreads with the rising price of high grade iron ore fines and also supported by renewed Chinese buying after the Labor Day holiday, SteelOrbis was informed on Friday, May 15.
Market sources said that ex-Indian iron ore pellet prices have moved up to a range of $107-108/mt CFR China, compared to $98-100/mt CFR last week.
Iron ore fines with Fe content 62 percent have exceeded $90/mt CFR China, and so Indian pellet producers have decided to increase prices of pellets to maintain spreads and the hike has been absorbed by the market which saw renewed restocking interest from Chinese steel mills and traders.
Citing reports in the market, the sources said that most of the trades concluded over the past week have been at the higher end of the range, indicating that with, steel exports remaining strong and Chinese steel mills having successfully lowered inventories, raw material restocking restarted soon after the resumption of full business after the Labor Day holiday.
Brahmani River Pellets Limited (BRPL), according to market reports, has concluded a contract for an estimated volume of 45,000 mt for early July at $108/mt CFR China for higher grade with alumina content less than three percent.
Jindal SAW which reported increasing plant capacity utilization during the past week has concluded a deal for 30,000 mt for end-of-June at $107.50/mt CFR for similar high grade material, market sources said.
A large private Odisha-based aggregating trader has reported a large deal for an estimated volume of 50,000 mt at the slightly lower range of $107/mt CFR China for material with alumina content slightly above the three percent mark, market sources said.
“The revival in steel demand and prices in China has been quicker than expected after being disrupted by the pandemic. The demand risk has been mitigated to a large extent. Now Indian prices will be more directly linked to supplies from competing originating suppliers,” a member of the Pellet Manufacturers’ Association of India (PMAI) said.
“Indian producers are keeping a sharp eye on reports of volumes that are being diverted from European destinations to China. I feel that, with the EU-based steel mills beginning to resume production, such diversion of volumes will also be less over the next several weeks, providing additional support to ex-India prices,” he added.