Seaborne iron ore pellet premium largely stable; low liquidity continues

Published by: Alice Li<>
28 Feb 2025 @ 11:57 UTC

The high-grade iron ore pellet premium in the seaborne market edged slightly lower in the week to Friday February 28 due to lower reselling liquidity in both seaborne and China’s portside markets, sources told Fastmarkets.Key drivers
Trading activities for Indian mid-grade pellets slightly improved with a few tenders from miners, but the traded price decreased further, mainly due to sufficient supply and limited demand.
There is increased shipment of pellets from India recently, however, the trading activities [for Indian pellets] at China’s portside market remained subdued, a Singapore-based trader said. This makes it hard to get a higher pellet premium in the seaborne market.
There is a bit of oversupply of all iron ore products, including pellets from India and the Middle East, capping pellet premiums, a Shanghai-based trader said.
An India-based trader said that most traders and miners focused on exporting lower grade pellets and fines from India recently, despite a declined trading price.
Some market participants said the continued weakness in the pellet premium was partially caused by the relatively strong mid-to-high grade iron ore fines sector above $105 per tonne, which are the base prices for pellet pricing.
Fastmarkets’ daily index for iron ore 62% Fe fines, cfr Qingdao averaged $106.15 per tonne in the week ended February 28, down by $1.65 per tonne from $107.80 per tonne in the previous week.
Fastmarkets’ daily iron ore 65% Fe Brazil-origin fine, cfr Qingdao averaged $119.19 per tonne during the week to Friday, down by $1.97 per tonne from $121.16 per tonne in the previous week.
A tender of 50,000 tonnes of March-loaded 63% Fe KIOCL was heard concluded at $105.65 per tonne Fob India on February 21, down from $108.32 per tonne FOB India traded in the previous week, several sources told Fastmarkets.
A 62.5% Fe Indian BRPL pellet cargo was heard traded at the March 62% Fe iron ore fines index with a premium of $6.5 per tonne to Malaysia, lower than the traded premium level of $7-8 per tonne in previous week.
Meanwhile, 66.5% Fe pellet from Brazil were heard to be offered at the average 65% Fe iron ore fines index with a premium $15-16 per tonne to Chinese buyers, yet bids remained below $12 per tonne, leading it difficult to conclude a deal in the short time.
Offers for 65% Fe pellet from the Middle East were aggressive to conclude deals, a Shanghai-based trader said. A fewer lower-quality pellets were offered with premium of only $8 per tonne.
A second Shanghai-based trader added that trading activities of imported pellets in the secondary market remained subdued because most steel mills applied limited usage of high-grade pellets to maintain a low production cost as possible.
And some buyers turned to take imported high-grade pellet feed with a lower premium and lower production cost to produce pellets.
Steel mills in North China have available domestic concentrate to produce pellets at lower cost [compared to imported pellets], and overall pellet consumption is also limited and stable compared to other iron ore brands, a Hangzhou-based trader said.
Fastmarkets’ weekly pellet prices 65% Fe blast furnace pellet, cfr Qingdao: $129.88, down $2.57 Iron ore pellet premium over 65% Fe fines, cfr China: $11.60, down $0.10
Trades/offers/bids heard in the market Spot market, tender, 50,000 tonnes 63% Fe KIOCL pellet, traded at $105.65 per tonne FOB India, laycan March 1-15
Spot market, 50,000 tonnes 63% Fe KIOCL pellet, traded at March average 62% Fe iron ore fines index with a premium of $11 per tonne and plus Fe VIU adjustment, laycan March 1-15
Spot market, 75,000 tonnes of 65% Fe pellet from the Middle East, offered at the March average of a 65% Fe iron ore fines index plus a premium of $11 per tonne to riverside of China, March arrival