India: Pellet prices rise marginally in Dec'21 on improved export sentiment

Domestic pellet prices across key Indian markets inched up m-o-m in Dec'21, as per SteelMint's assessment.

Prices rose on the back of export deals concluded in mid-Dec alongside a slight uptick in sponge iron and semi-finished steel prices. Active buying enquiries were seen last month.

SteelMint bi-weekly pellet index, PELLEX, moved up by INR 1,050/tonne (t) m-o-m to INR 10,700/t DAP-Raipur on 31 Dec'21.

Prices in various regions:

• Raipur: Pellet (Fe 62.5/63%) offers were assessed at INR 10,700-11,000/t exw-Raipur in end-Dec'21, up slightly by INR 200/t m-o-m.
  
  
• Bellary: Pellet (Fe 63%) prices were down marginally by INR 100-200/t m-o-m to INR 10,300/t on exw basis in end-Dec'21.
  
  
• Barbil: Prices of Fe 63% pellets were slightly up by INR 100-300/t to INR 9,300-9,500/t on loaded basis during end of the month.
  
  
• Jharsuguda: Pellet (Fe 63%) prices rose by INR 400-500/t to INR 9,800-9,900/t exw in end-Dec'21.
  
  
• Jamshedpur: Pellet (Fe 63%) prices increased by INR 200-500/t to INR 9,500-9,700/t exw in end-Dec'21.
  
  
• Kandla: Pellet (Fe 63/64%) prices increased by INR 950/t to INR 11,700/t DAP Kandla in end-Dec'21.
  
  

Trades in key markets

A total of 768,500 t of deals were recorded in Dec, a sizeable 135% m-o-m increase against 326,500 t of confirmed deals recorded in Nov'21.

Trade volumes in t
Source: SteelMint Research

Exports resume

Indian mills had reportedly booked 2-3 pellet export deals around mid-Dec'21 on renewed buying interest from China ahead of the Christmas and New Year holidays. This lifted sentiments in the domestic market, leading to a rise in pellet prices.

SteelMint's India pellet export index (Fe 64%, 3% Al, FOB east coast) rallied by around $7/t on a m-o-m basis to $137/t in Dec'21.

Sponge, billet prices recover

In mid-Dec'21, prices of sponge iron and semi-finished steel saw a recovery after falling consistently over the past couple of months. A significant rise in coal prices supported sponge iron and billet prices, thereby boosting domestic pellet prices.

SteeMint's sponge P-DRI assessment in Raipur rose by INR 2,050/t m-o-m to INR 30,950/t on exw basis in Dec'21.

Outlook

India's pellet prices are expected to remain volatile on subdued domestic demand, although export demand has improved.

Furthermore, with PSU miner NMDC lowering iron ore prices for Jan'22, it is more likely that mills will prefer substitutes over pellets due to cost factor.