China iron ore pellet: Demand muted

Seaborne pellet prices dropped amid muted demand and ample supplies.

The Argus 64pc Fe, 3pc Al pellet was assessed at $107/dry metric tonne (dmt) this week, down by $2/dmt from last week. The 2pc Al was assessed at $109/dmt.

Offers for India-origin BRPL pellet were at $113/dmt, flat from last week. Some offers for Indian pellet were also at $105-106/dmt. KIOCL pellet with 2pc Al was offered at $98-100/dmt on a fob basis converting to a $111.50/dmt cfr China price. There were no deals this week.

Several Indian pellet producers are not currently making fresh export offers, focusing more on domestic sales. A large-scale Odisha-based Indian pellet producer reported selling pellet cargoes at around $110/dmt in the domestic market. Domestic pellet sales price in the central Indian state of Chhattisgarh was around $84/dmt, according to a producer in the state.

Portside pellet was sold at Yn960/wmt, or a seaborne equivalent of $120/dmt, in Jingtang port today and Yn960/wmt in Jingtang and Yn950/wmt in Lianyungang on 5 September.

A cargo of Indian pellet with 64.52pc Fe was offered at Yn970/wmt at Caofeidian port today.

KIOCL and Godwari pellet with 2pc Al were offered at Yn1,010/wmt and Yn1,000/wmt respectively at Rizhao.

Lump is still much cheaper than pellet at the portside markets, with PB lump sold today at Yn780-790/wmt making mills use more lump as direct charge material in the furnace burden.

Mainstream lump prices have seen some upside this week, although it will possibly be capped by large lump inventories at the main Chinese ports.

Unconfirmed deals for Brazilian producer Vale's pellet cargoes in China were done at a $6/dmt discount to the 62pc fines index with pellet premium. There are expectations that Vale may step up pellet sales into China in the October-December quarter as European demand has slowed.