Indian iron ore pellet export prices have been kept relatively stable with only marginal increases in the past week, attracting strong buying from Chinese buyers in view of the uptrend in prices of high grade iron ore fines, sources said on Friday, June 5.
With the sharp rise in iron ore fines prices of higher grades and Indian exporters only effecting nominal hikes in pellet prices, the differentials have narrowed significantly between prices of the two grades of raw material, attracting higher-volume pellet trades during the past week.
Market sources said that ex-India iron ore pellet prices have increased marginally by $1-2/mt during the week to $113-115/mt CFR China.
The sources said that traders, particularly in the eastern Indian state of Odisha, have increased activity of both stocking up at port stockyards and concluding large-volume trades, rushing to beat the expected lull with the approaching monsoon rainy season.
Citing reports in the market, the sources said that one aggregating trader concluded a deal for an estimated volume of 30,000 mt with a Singapore-based trader at $115.5/mt for high grade pellet with alumina content of less than two percent.
A second aggregate trader reported a deal for 25,000 mt with a China-based trader at a slightly lower price of $114/mt CFR for a grade with alumina content of less than three percent, the sources added.
Brahmani River Pellets Limited (BRPL), according to market reports, has concluded a contract for 50,000 mt for August delivery at $113-114/mt CFR. State-run KIOCL has concluded a contract for August delivery for 50,000 mt at around $113/mt CFR, but the identity of the buyer could not be confirmed in the market.
“With the price of higher grade iron ore fines increasing in China, the price differential with pellets has been narrowed, particularly with Indian exporters keeping prices almost stable, attracting a higher number of buyers,” a member of the Pellet Manufacturers’ Association of India (PMAI) said.
“The market demand-price dynamics are not of much concern for Indian exporters. But the focus of the Covid-19 pandemic is shifting from the EU and the US to countries like Brazil and India. Covid-19 cases are still increasing exponentially in both these raw material countries and now total cases in India are the seventh highest in the world. The industry is extremely anxious about fresh disruptions following close on the heels of industry and the economy re-opening. This will bring new uncertainties to exports,” he added.