India: Pellet trade volumes fall 20%, m-o-m, owing to high offers in August

India's domestic pellet market saw trade volumes falling by 24% m-o-m to 425,400 tonnes (t) in August compared to 558,000 t in July.

Pellet demand across the key markets remained weak throughout the month, mainly due to higher offers supported by elevated sponge iron prices, especially during the first half of the month. However, in the latter half, pellet demand slowed down with improved supply of iron ore lumps.

Notably, NMDC recorded iron ore rake movement from Chhattisgarh at 291 rakes in August, up sharply by 71% against 170 rakes in July, according to data maintained with SteelMint. These figures include movement within and to other state-based units but exclude supply to AM/NS India through slurry pipeline.

Prices up marginally m-o-m

Domestic pellet prices across key markets increased in August. However, demand remained largely subdued.

SteelMint's average monthly pellet index, PELLEX, moved up by INR 270/t m-o-m to INR 8,890/t DAP Raipur compared to INR 8,620/t in July.

Outlook

Despite improved iron ore supply, pellet prices are unlikely to go down further from current levels on expected steel price hike announcements by the primary producers.