Low grade ore missed the China boat

Chinese mills are set to continue importing Indian pellets of 64fe ore with traders expecting to export 10-11 million tonnes this year (2019), up from 9.5 million tonnes in 2018.

“Pellet demand is good in China,” said a trading company executive at the Singapore Iron Ore Forum on 9 May 2019.

Price of Indian pellet of 64fe ore with 3% aluminum content was between US$122-$125 per tonne during the week of 9 May 2019, up from US$114-$116 in February 2019.

Pallet prices were coming up though these were still off from the October 2018 peak of US$150 per tonne, according to one trader.

While the outlook is positive for pellet trade, Indian producers of low-grade iron ore, 58fe, have missed the high price deals with the Chinese mills.

Goa is not allowing export of low-grade iron ore while exports from the east coast is nominal.

Low grade ore export would hardly be about 10 million tonne to China this year as it was last year, according to the traders at Forum which focused on raw materials and markets prospects.

There was a “strong viability” of exporting iron ore of 58fe to China at a discount to the 62fe Index price of US$90 per tonne in recent months, said a Hong Kong-based trader.

Iron ore 62fe Index price have doubled to US$90 per tonne CFR China from a low of US$45 in 2015.

The Chinese mills, having made strong profits recently, are now switching to higher grade ore which means Indian iron ore will be out of the Chinese market unless offered at a bigger discount.

A Chinese trader noted the ongoing issues with mining licences, logistics and transportation limitations faced by Indian iron ore sector.

In 2007, India was among China’s largest iron ore suppliers with 100 million tonne shipped, according to the traders. fiinews.com