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India: Domestic pellet trade volume climbs up by 50% m-o-m in Nov'24

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Pellets

BigMint Bureau

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31 Dec 2024, 15:55 IST

India: Domestic pellet trade volume climbs up by 50% m-o-m in Nov'24

Restocking activities support trade volume

Pellet prices in Raipur fall INR 500/t m-o-m

Pellet trade volumes in the Indian domestic market rose 50% m-o-m to 982,000 tonnes (t) in November 2024 from 655,000 tonnes (t) in October, according to data maintained by BigMint. This rise was mainly fuelled by restocking activities in the first half of the month and lower bids at the auction from Odisha Mining Corporation (OMC).

Factors affecting domestic pellet trade volume

Fall in pellet offers: November's pellet offers were lower than October's, which attracted buyers. At the same time, steelmakers ramped up procurement in expectation of a demand pick-up towards the end of the year.

Resumption of operations: The increase in trade volume can also be attributed to the resumption of operations at several plants that had undergone maintenance shutdowns in October. These plants re-entered the market in November and engaged in several deals.

Subdued export demand: BigMint's India pellet (Fe 63%, 3% Al) export index dropped to $97/t FOB east coast in November as compared to $98/t FOB in October. Demand for pellets was limited in the seaborne market amid bid-offer disparities between buyers and suppliers. Additionally, the decline was driven by the Chinese government's announcement of an RMB 10 trillion debt package and followed the conclusion of the US presidential elections.

Shortage of high-grade lumps: The limited availability of high-grade lumps was a major concern among steelmakers and prompted them to turn to pellets amid a fall in offers.

PELLEX records downtrend m-o-m

The monthly average domestic pellet index, PELLEX, dropped by INR 500/t m-o-m in November to INR 9,650/t DAP Raipur amid weak demand and a downturn in sponge PDRI and steel prices.

M-o-m pellet trade comparison

Outlook

The domestic pellet trade volume is likely to remain volatile, under pressure due to uncertainties in the sponge and billet markets. However, subdued export demand and cautious buying due to weak steel prices could limit significant trade volumes.