China iron ore pellet: Demand muted

Seaborne pellet prices were flat amid weaker demand, with steel mills still preferring to use more lump as direct-charge material in the furnace burden.

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

Two cargoes of JSPL Indian pellet with September were done at $107/dmt on 13 September. Rashmi and JSPL pellet cargoes were offered at $112/dmt and $110/dmt respectively today. A cargo of Ardent pellet was offered at $109/dmt. An unconfirmed offer for BRPL pellet was at $106/dmt.

BRPL sold an index-linked pellet cargo to Turkey but price details were unavailable.

Bids for Indian pellet cargoes in the Chinese market were mostly at $100-102/dmt.

Indian pellet with 3pc Al at ports were sold at Jiangtang port yesterday at 925 yuan/wet metric tonne (wmt), or a seaborne equivalent of $115.40/dmt. A cargo of 3pc Indian pellet was sold at Yn918/wmt yesterday at Rizhao port. A 2pc Al Indian pellet was sold yesterday at Yn980/wmt in Jingtang and Yn960/wmt in Tianjin.

Mills have increased the lump proportion in the furnace burden, lifting demand and prices of mainstream lump cargoes in the seaborne and portside markets. The premium of Indian pellet over PBL has narrowed to around Yn110/wmt today from Yn160-170/wmt last week.

Concerns about additional pellet supplies from Brazil's Vale entering the market during the October-December quarter also dampened sentiment.