Indian iron ore pellet export prices have been kept stable with producers unwilling to risk buyers’ resistance to higher prices against the backdrop of higher volume availability of iron ore concentrates in the Chinese market, SteelOrbis has learned on Friday, June 12.
According to the traders, ex-India pellet offers have continued to attract sustained bookings by Chinese buyers, but Indian producers have refrained from increasing export prices amid reports of large deals for high grade concentrates being concluded at discounts to China.
Market sources said that local pellet producers have maintained export prices in the range of $113-115/mt CFR China and sustained demand has been evident from most of the deals being concluded at the higher end of the range.
Sources said that Godavari Power and Ispat Limited (GPIL) has reported concluding a trade of an estimated volume of 30,000 mt for August delivery at $114/mt CFR China, while Brahmani River Pellets Limited (BRPL) has contracted 35,000 mt for August delivery with Chinese buyers at a higher price of $115/mt CFR China for high grade with alumina content of less than three percent.
An Odisha-based aggregating trader has reported a trade for around 25,000 mt for August delivery with a China-based trading firm at price estimated at $113-114/mt CFR China, the sources said.
According to a member of the Pellet Manufacturers’ Association of India (PMAI), higher inflow of iron ore concentrates, particularly high tonnages originating from Ukraine, and reports of discounting could limit the upside trajectory of Indian pellet export prices, but ongoing high crude steel production in China would keep ex-India prices at high levels.
The PMAI member said that during the April-May period Indian pellet shipments averaged 2 million mt per month and that the momentum will be sustained over the next few months depending on how fast deliveries from Brazil are normalized.
According to an official at GPIL, the company which has a 2.1 million mt per year pellet plant and exported 600,000 mt in the last fiscal year is targeting sales of above 1 million mt in the current fiscal year. The iron ore pellet exporter is also aiming to increase its margin realizations by shifting its entire sourcing of iron ore fines to captive mines, whereas it sources 30 percent of raw materials through commercial purchases at present.