China iron ore pellet: Sintering curbs kick in

Market: Metals
22/10/19

Seaborne pellet prices rose this week, as steel mills stepped up use of direct-charge material on the back of sintering restrictions in Hebei and Shandong provinces.

The Argus 64pc Fe, 3pc Al pellet was assessed at $104/dry metric tonne (dmt) this week, up by $1/dmt from last week. The 2pc Al was assessed at $107/dmt. The premium between 2pc and 3pc Al pellet widened to $3/dmt from $2/dmt last week.

Trading activity increased compared with last week. Three cargoes of Rashmi Indian pellet were sold at $107/dmt each on 19 October. An unconfirmed deal yesterday for 170,000t of Vale's 66.5pc Fe AF80 pellet with 11-20 October loading in Oman was done at a $23.50/dmt premium to the November MB65 index.

A cargo of JSPL Indian pellet with late October loading was offered at $104/dmt, while a November-loading cargo was offered at $105/dmt. A cargo of BRPL for end-October loading was offered at $106-107/dmt with a bid at $104/dmt.

A cargo of BRPL Indian pellet with 1-10 November loading dates was offered at $105/dmt. A cargo of KIOCL 2pc Al cargo was offered at $115/dmt cfr over the weekend.

The portside market saw BRPL pellet sold today in Jingtang at 885 yuan/wet metric tonne, or a seaborne equivalent of $110.25/dmt. A mill yesterday bought a cargo of Indian pellet at Yn880/wmt at Qingdao port. Portside deal prices were sharply lower from last week's prices of Yn910/wmt and Yn920-925/wmt in Shandong and Caofeidian respectively.

The premium of cargoes sold at Hebei ports on Shandong cargoes was at most Yn5/wmt this week compared with around Yn20-25/wmt last week as demand weakened in north China.

The differential between 2pc and 3pc Al Indian pellet is widening with mills seeking more low Al variant cargoes.

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