India’s iron ore pellet export activity has bounced back during the past week with the sharp rise in total volumes traded supported by a revival in Chinese buying, though prices moved marginally lower in reaction to more pellet producers bringing back plants into production and domestic steel mills virtually stopping raw material restocking, SteelOrbis has learned on Friday, April 24.
Market sources said that ex-India iron ore pellet export prices are marginally down by $1-2/mt over the past week to $97-98/mt CFR China, with most volumes contracted at the lower end of the range for high-grade material with alumina content of less than three percent.
The downtrend of Indian pellet export prices has largely been in reaction to the steady fall in local prices, which are down INR150/mt ($2/mt) week on week to INR 5,850/mt ($76/mt) ex-pithead excluding all statutory levies, duties and taxes, the sources said.
KIOCL (formerly Kudremukh Iron Ore Company Limited) has reportedly concluded two deals for an aggregate volume of 50,000 mt for end-of-May and early June deliveries with traders in China at a price range of $96.5-97.5/mt CFR China, market sources said.
Similarly, Brahmani River Pellets Limited (BRPL) has also concluded an export contract for 50,000 mt for early June delivery with buyers in China at a price of around $98/mt CFR China, for high grade pellet with alumina content of less than three percent.
Yet another pellet producer with a plant located in the eastern Indian state of Odisha has reported an export contract for 45,000 mt for end-of-May delivery at a price ranging between $97-98/mt CFR China, according to sources.
Several traders and producers have estimated that an aggregate volume of around 400,000 mt of pellet export contracts were concluded during the past week by both producers and aggregating traders, as Chinese buyers, steel mills and traders were taking advantage of ex-Indian pellet prices being at a five-month low.
However, despite the surge in export volumes, supply-side pressures have prevented prices from strengthening. Market sources said that, with reports indicating that the lockdown will end on May 3 and the government focusing on getting economic activity back on the rails, several pellet producers are bringing plants back into operation, such as Godavari Ispat and Power Limited along with its subsidiary group company resuming production at pellet plants with an aggregate output capacity of 2.7 million mt per annum during the past week.
$1 = INR 76.80