India: PELLEX falls by INR 150/t in recent deals from eastern India

• Trades remain muted in Raipur
  
  
• Some deals heard from Odisha
  
  
• Market awaits OMC iron ore auction
  
  

BigMint's bi-weekly domestic pellet (Fe 63%) index fell by INR 150/tonnes (t) ($2/t) to INR 10,300/t ($123/t) DAP Raipur on 17 May,2024 compared to the last assessment on 14 May. Raipur sponge and steelmakers booked around 10,000 t of pellets (Fe 62.5+/-0.5%) at around INR 10,000/t DAP Raipur in this publishing window.

In another deal, around, 15,000 t of pellets of higher grades (Fe 66%) were booked at INR 12,850/t DAP Raipur. Few more deals around 10,000-15,000 t were heard in Raipur from neighbouring regions but yet to be confirmed till publishing this article.

Godawari kept pellet offers stable for Fe63.5% and Fe66% at INR 11,200/t ($134/t) and INR 12,700/t ($152/t) exw-Raipur respectively on 17 May. Other pellet producers kept offers stable at INR 10,500-10,600/t ($126-127/t) exw.

The market participants quoted that they are currently waiting for Raipur offers to revised. Some buyers already have sufficient quantity in the stock to operate the plants. However, few buyers purchase pellet from Odisha region as they had received the landed offer at reasonable price around INR 600-700/t against local Raipur pellet prices.

The bids and offers disparity were seen in Raipur region this week which lowered the trading activities in Raipur. The bids were remained INR 300/t against the offers.

The NMDC workers has slightly eased out this week and iron ore lumps material delivery started recently which weighed on the pellet buyings.

A trader said: "Raipur pellet buyers were looked for the cheaper material but sellers in Raipur kept their offer stable. The steelmakers are waiting for some strong market fundamentals. The Raipur pellet prices may change next week after the OMC iron ore auction likely to schedule on 21 May after the Loksabha election in Odisha".

The steel market showed some positive signs in this week which may boost the steelmakers confidence for pellet purchasing.

• Sponge P-DRI prices stable w-o-w: BigMint's P-DRI (FeM 80%) prices increased by INR 150/t ($2/t) d-o-d to INR 29,600/t ($354/t) exw on 17 May. However, prices remained largely stable w-o-w. Buyers were active in booking materials at the start of this week and had placed sufficient orders. However, due to the continuous increase in prices, buying demand remained limited in today's trading session.
  
  
• Billet prices rise by INR 250/t w-o-w: Billet prices in Raipur increased today by INR 250/t ($3/t) w-o-w to INR 44,750/t ($537/t) exw while inched upby INR 100/t ($1/t) d-o-d The index climbed as offers increased. As market participants wait for prices to stabilise, transactions in semi-finished and finished steel remain moderate.
  
  

Rationale

• PELLEX has been derived using data points, i.e., trades, offers, and bids. To download the detailed methodology Click here.
  
  
• One (1) deals were reported so far in this publishing window and was taken into account for price calculation and accorded 50% weightage for T1 trade.
  
  
• Twenty three (23) firm offers, bids, and indicative prices were heard. Nineteen (19) were taken for price calculation and given the balance 50% weightage.
  
  

Outlook:

Pellet prices in Raipur are expected to remain volatile amid offer-bid disparities. The market is also awaiting OMC's iron ore e-auction scheduled next week for better price clarity on iron ore prices.