Despite iron ore prices in China remaining firm with a positive outlook, Indian pellet export price have remained range-bound in the past week, moving in band of $1/mt amid muted trading conditions as producers are unwilling to risk February bookings in view of the Indian government’s indication that it favours the imposition of a ban on exports of iron ore.
Ex-India pellet prices have been maintained in the range of $138-140/mt CFR China and even the limited trades have been concluded mostly at the lower end of the range and bids for larger volumes are not acceptable to a number of local producers.
“The government has clearly accepted a rising demand-supply gap in the local iron ore market, despite miners disputing it. The government has also announced that it is in favour of imposing a ban on exports, even for a limited period,” a member of the Pellet Manufacturers’ Association of India (PMAI) said.
“Under the circumstances, pellet producers are wary of risks in accepting large-volume bookings for February delivery if a ban is imposed, halting the sourcing of fines from merchant miners,” he said.
At least one producer said that the government should clarify immediately whether supply contracts concluded before the effective date of a ban would be permitted by the government, in order for exporters to plan their business transactions.
It was pointed out that, despite higher volume arrivals of iron ore at Chinese ports over the past week, prices have still been inching up, indicating that the raw material outlook remains very positive, but this is unlikely to impact Indian exporters as there have been too many uncertainties in the local market over an imminent ban and exporters are cautious about risking new bookings and increasing prices.
Market sources said that an Essel Mining group company has reportedly concluded a trade of an estimated tonnage of 20,000 mt at a price of around $138/mt CFR China, which was lower both in volume and price compared to the trading levels in the earlier week.
Brahmani River Pellets Limited (BRPL) has reported a trade of around 25,000 mt at a slightly higher price of $140/mt CFR China for higher grade with alumina content less than three percent, the sources said.