Iron ore pellet prices expected to ease with Chinese buyers on sidelines
Trading activity in the seaborne iron ore pellet market was subdued last week, with some participants expecting prices to come down.
The MB 65% Fe Iron Ore Pellet Index, published by Fastmarkets MB, was at $160.54 per tonne cfr China on Friday October 12, down by $1.10 per tonne from a week earlier.
The fall in the MB 65% Fe Iron Ore Pellet index (MBIOI-PT) was based on the visible market activity detailed below.
Data was included in the index calculation according to the published methodology. Any data received under Data Submitter Agreements or subject to a confidentiality request will not be published. No data was discarded in the calculation of these indices.
There were no iron ore pellet trades heard during the week, with an offer for Indian-origin material heard at $153 per tonne cfr China while the bid was at $145 per tonne.
The assessment range stood around $150-160 per tonne cfr China, with low-alumina Indian-origin materials assessed at the high end of the range.
Offers on Indian-origin pellet were likely to drop amid lack of bids from the Chinese market, a source from India said, who also expects a correction in domestic Indian prices.
“Some of the pellet producers in India are also steelmakers and high domestic pellet prices pushed up prices for iron ore fines and that is not desirable for their steelmaking business,” he said.
Domestic steel prices in India, however, remain underpinned, with Fastmarkets MB’s weekly assessment of hot rolled coil (HRC) ex-works at 46,500-47,000 rupees ($630.53-637.31) on Friday October 12, unchanged week on week and its highest level this year.
Pellet production in India has been improving due to the end of the monsoon season, which was also a factor behind his bearish outlook on offer levels, the source also said.
Mills’ narrowed margins may affect buyers’ appetite for high-priced seaborne pellets, though the prices were unlikely to drop significantly, another source from China said.
The weekly MB 66% Fe Iron Ore Concentrate Index stood at $101.67 per tonne cfr China on Friday October 12, up by $1.03 per tonne from October 5.
The daily MB 65% Fe Iron Ore Index averaged $97.06 per tonne cfr China last week, compared with an average of $96.40 per tonne cfr China the previous week.
Nine 65,000-tonne cargoes of 65% Fe Karara concentrate were traded at a premium of $4.20 per tonne cfr to a 65% Fe index, with delivery in November.
A 175,000-tonne parcel of 65% Fe Ukranian concentrate was traded at a premium of $3.50 per tonne to a 65% Fe index, for late October arrival.
A 65% Fe Citic Pacific concentrate cargo was heard to have changed hands at a 65% Fe index plus a premium of $2-2.50 per tonne, with its laycan set for some time in November.
A 66% Fe Chilean concentrate cargo was assessed on arrival at the monthly average of a 65% Fe index with Fe adjusted plus a premium of $4 per tonne, with delivery in November.