Indian iron ore pellet export offers stable

India's pellet export offers have been largely stable this week amid sluggish demand from Chinese buyers.

Offers for pellet were at $145-150/dry metric tonne (dmt), fob India, with buyers in China having little interest in Indian pellet for the second week in a row. Indian exporters expect to see an increase in Chinese demand from next week. China's deal price for Indian pellet is seen as a key indicator that helps set prices in other destinations such as Japan and South Korea.

Large-scale Indian producers such as Jindal Steel and BRPL are each exporting around 200,000 t/month of pellet, with total pellet exports in the 2018-19 fiscal year started 1 April forecast to be in a 9mn-10mn t range.

Exporters could maintain their profit margins despite lower US dollar denominated prices as the rapid depreciation of rupee against the dollar helps boost their rupee-based earnings.

State-controlled KIOCL, which is the only major exporter of low-alumina pellet in India, is expecting bids at around $150/dmt fob New Mangalore port for a tender of 50,000t pellet that opened for bidding today.

Essar Steel, India's largest pellet producer and exporter, has not been offering cargoes over the past few weeks. It will probably remain on the market sidelines in the short term, as it is using most of its pellet for its own steel-producing operations, said market participants.