India: PELLEX falls INR 100/t ($1/t) amid limited trade

Pellet offers from Raipur-based producers dropped after the Dussehra holidays owing to lack of trades. Meanwhile, prices in Raipur remained under pressure as no trade was reported so far this week. However, a major plant is under maintenance shutdown over the next few weeks.

BigMint's bi-weekly domestic pellet (Fe63%) index dropped by INR 100/t ($1/t) to INR 10,000/t ($119/t) DAP Raipur on 15 October compared to the previous assessment on 11 October.

On the other hand, competitive prices in nearby regions also kept local prices under pressure. However, not many bookings were heard so far this week. Buyers are also in a wait-and-watch mode amid falling sponge iron prices.

An Odisha-based producer said: "Pellet prices in Odisha have remained at similar levels due to weak buying interest in the region. Market participants are also waiting for OMC auction. Some sellers have quoted higher offers which have resulted in absence of trading activities."

"Due to festivals last week, stakeholders were out of the market resulting in lower trading activities in the region", sources informed BigMint.

Factors driving PELLEX

• Pellet offers fall in Raipur: Raipur-based manufacturers kept their offers for Fe 63% (+/- 0.5%) pellets at INR 10,000-10,100/t ($119-120/t) exw-Raipur.
  
  
• Sponge iron prices decline w-o-w: P-DRI prices sharply declined INR 950/t ($11/t) w-o-w to INR 27,850/t ($331/t) exw-Raipur on 15 October. Meanwhile, prices decreased by INR 150/t ($2/t) d-o-d. Sponge iron prices fell as buyers remained cautious in an uncertain market environment.
  
  
• Billet prices fall w-o-w: Billet prices in Raipur also fell by INR 700/t ($8/t) w-o-w to INR 41,250/t ($491/t) exw, and decreased by INR 350/t d-o-d. Fluctuation in semi-finished and finished steel market have weaken buying interest in the region, resulted in falling billet prices.
  
  

Rationale

• PELLEX has been derived using data points, i.e., trades, offers, and bids. To download the detailed methodology, click here..
  
  
• No deal was reported in this publishing window, therefore not taken into account for price calculation and accorded a 0% weightage for T1 trade.
  
  
• Nineteen (19) firm offers, bids, and indicative prices were heard. Eighteen (18) were taken for price calculation and given the balance 100% weightage.
  
  

Outlook

Pellet prices in Raipur are expected to remain volatile as buyers have booked material and also because the sponge and semi-finished steel markets have softened. Competitive offers and weak buying interest may keep the market under pressure.