Premiums of Pellets and Lumps may Dragged Down by Increasing Supply of India Fines

SHANGHAI, Feb 10 (SMM) - In the heating season this winter, the production limit for environmental protection was relatively loose, but the sintering machine was significantly affected and the demand for lump ore declined sharply year-on-year, dragging down the premiums to a low level.

In addition, the domestic production capacity of pellets continued to expand in the past two years, but the supply increased more rapidly, which suppressed the prices. In light of poor profits, some pellet factories stopped the production for maintenance around the Chinese New Year holiday and the supply slightly tightened. As such, the demand for imported pellets increased and the premiums increased slightly. In hindsight, steel mills still mainly use low and medium-grade iron ore amid the slow recovery of downstream demand and the poor profits. Therefore, the demand for lump ore and pellets is unlikely to increase significantly. Amid the seasonal low of Australia's shipments, it is expected that the arrivals of lump ore in February will still be low, and the lump ore premiums may continue to rise. However, after the relaxation of tariffs in India, the supply of pellets has increased, which may drag down the premiums in February.