India: Pellet trade volumes surge 120% m-o-m in Nov'22

India's domestic pellet market saw a whopping 120% m-o-m rise in trade volumes to 761,350 tonnes (t) in November 2022 compared to 346,300 t in October, as per SteelMint data.

The surge in trade volumes resulted from the decline in pellet prices at the beginning of November and later due to some panic selling in the domestic market post export duty withdrawal by the Indian government on 19 November.

Around 3,00,000-3,50,000 t of pellet deals for exports were concluded post duty rollback.

Low-grade iron ore pricing in the domestic market and limited availability of high-grade ore supported pellet prices.

However, most were in a wait-and-watch mode amid falling sponge iron and semi-finished steel prices.

The monthly average of SteelMint's Rourkela sponge iron, CDRI, index fell by 6.3% m-o-m to INR 31,630/t exw.

Similarly, Raipur billet index also decreased 10% m-o-m to INR 42,880/t exw.

Prices rangebound

Pellet prices across key markets in India remained largely stable m-o-m in November owing to hike in domestic offers in the latter half of the month post duty removal.

However, pellet export realisations are still lower than prevailing domestic prices. The key buyer China is out of the market. This coupled with dull domestic demand with buyers adopting a cautious approach and weak billet and sponge iron markets kept pellet under pressure.

On the other hand, higher prices of high-grade iron ore lent support to pellet prices, keeping them stable m-o-m.

SteelMint's pellet index, PELLEX, inched up by 1.2% m-o-m to INR 8,040/t DAP Raipur in November.

Outlook

Pellet exports are expected to pick up if Chinese traders turn active in restocking before the Lunar New Year holidays.

Thus, expected improved export realisations as well as increasing prices of high-grade fines may keep pellet prices supported in the coming month.