Indian iron ore pellet export prices have increased in reaction to higher futures prices and iron ore concentrate prices in China, but sentiment has become cautious amid high prices, resulting in a fall in trades.
Ex-India pellet prices have bounced back riding on higher prices of fines in China and the sharp fall in dispatches of fines from mines in Odisha and the tightening of raw material supplies in the local market for pellet producers.
Market sources said that Indian iron ore pellet prices are at $112-114/mt CFR China, compared to offers ranging at $102-105/mt CFR early this month.
However, the sources said that both the number of trades concluded during the past week as well as the average tonnage per transaction are on lower as buyers are cautious about concluding large deals at higher prices.
Sources said that Brahmani River Pellets Limited (BRPL) has concluded a transaction for an estimated volume of 20,000 mt with a Chinese buyer at a price of around $114/mt CFR for high grade pellet with alumina content of less than three percent.
The same producer has also concluded a September delivery contract for 25,000 mt with a Singapore-based trading firm at $112/mt CFR for end-of-September delivery.
State-run miner and pellet producer KIOCL has concluded a deal for an estimated 35,000 mt at around $112-114/mt CFR, but the company did not disclose the buyer’s identity but the market has speculated that it could be an Asian trading firm.
ASL Limited has concluded an export deal for 25,000 mt with Chinese trading firm at around $112/mt CFR, market sources said.
“Sentiments among buyers in the short term are cautious. But the outlook is positive and prices of rebar and other steel products are rising and expectations of higher raw material consumption by Chinese steel mills and this is being reflected in the futures market which in turn is providing support to seaborne and spot prices,” a member of the Pellet Producers’ Association of India (PMAI) said.
“In the local market, dispatches of iron ore fines from pitheads is getting tighter, particularly in Odisha in view of monsoon rains, and this tightening of feedstock with pellet producers is also pushing up prices,” he added.