Indian iron ore pellet export prices have come under renewed pressure in the past week from the softening of demand, higher supplies of ex-Ukraine volumes and uncertainties regarding the Sino-Indian trade environment.
Market sources said that Indian iron ore export prices have lost around $2/mt during the past week to the range of $106-108/mt CFR China, matched by the fall in the number of trades concluded with buyers.
Higher volumes of ex-Ukraine iron ore pellets coupled with the softening of demand for pellets from Chinese steel mills have prompted several Chinese trading firms and Singapore-based traders to limit their trades to small-volume deals.
Market sources said that Brahmani River Pellets Limited (BRPL) has concluded a contract for a lower-than-usual volume of 20,000 mt at the lower end of the price range at $106/mt CFR China, with sources pointing out that the lower deal price was for high grade pellets with alumina content of less than three percent, reflecting the weakness in the market.
An Odisha-based aggregating trader concluded a small-volume contract for 15,000 mt with a Singapore-based trading firm at the marginally higher price of $107/mt CFR for end-of-August delivery, the sources said.
“The expected July arrival of ex-Ukraine iron ore pellets at Chinese ports is reported to have sharply increased over the current month deliveries, with reports here indicating that these were at least $1-2/mt at discount over ex-India prices. This is putting increased pressures on prices of Indian producers at a time when demand from Chinese steel mills is also tapering off,” a member of the Pellet Manufacturers’ Association of India (PMAI) said.
“Buyers and trading firms in China and Singapore with supply contracts with Chinese steel mills are also unnerved by reports that Indian export consignments are being held back at ports like Hong Kong and Qingdao in retaliation for Indian ports inspecting every ex-China consignment. No buyer, including trading firms, can afford to have consignments held back at ports, which increases costs of shipment at a time when demand is low and margins are thinning,” he added.