India: PELLEX falls INR 250/t tracking price cuts by Raipur producers

• Local offers fall by INR 300/t
  
  
• Market awaiting NMDC's iron ore price revision
  
  
• Export market subdued on falling global prices
  
  

BigMint's bi-weekly domestic pellet (Fe 63%) index decreased by INR 250/t ($3/t) to INR 9,300/t DAP ($112/t) Raipur on 23 February 2024 compared to the last assessment on 20 February. No deals were recorded from the Raipur region in this publishing period.

The major plants reduced pellet offers by INR 300/t yesterday owing to sluggish market sentiments prevailing over the sponge iron and other semi-finished and finished steel segments. However, a major pellet-maker kept offers unchanged owing to enough existing bookings for the month.

Sourced claimed that Odisha-based plants also reduced pellet prices by INR 200-300/t recently following lower bids in OMC's iron ore auction. A few neighbouring pellet producers were heard offering pellets (Fe 62.5%) to Raipur at landed prices of INR 9,000/t. Cost-effective landed pellet offers continued to weigh on Raipur pellet offers.

A buyer source said, "The bid-offer disparity forced pellet producers to reduce offers. However, no bookings were witnessed at revised offers."

A trader said, "NMDC Chhattisgarh iron ore price revisions are yet to be announced and most of the market participants are uncertain. They have adopted a wait-and-watch policy hesitating to book new material. A few plants had sold sufficient quantities and did not reduce offers."

Rationale

• PELLEX has been derived using data points, i.e., trades, offers, and bids. To download the detailed methodology Click here.
  
  
• No deal has been reported so far in this publishing window and has not been taken into account for price calculation and accorded 0% weightage for T1 trade.
  
  
• Eleven (15) firm offers, bids, and indicative prices were heard. Nine (9) were taken for price calculation and given the balance 100% weightage.
  
  

Market highlights

• Pellet offers fall in Raipur: Godawari Power and Ispat Ltd (GPIL) has reduced pellet (Fe 63% +/-0.5) offers by INR 300/t ($4/t) to INR 9,500/t ($115/t) exw-Raipur on 22 February. Another major pellet maker from Raipur has also reduced offers by INR 300/t ($4/t) to INR 9,100-9,200/t ($110-111/t) exw yesterday. Cautious approach from buyers amid m-o-m lower bids in OMC auction along with the sluggish domestic market forced pellet makers to drop offers.
  
  
• P-DRI prices stable w-o-w: BigMint's P-DRI (FeM 80%) prices remained stable w-o-w at INR 26,300/t exw on 23 February. However, the assessment for the sponge in Raipur increased by INR 100/t d-o-d today. India's sponge iron market witnessed a rise in prices today ranging from INR 100-300/t in almost all principal locations. This can be attributed to active spot trading coupled with buying interest.
  
  
• Billet prices in Raipur rise: Billet prices in Raipur remained increased by INR 450/t d-o-d to INR 39,500/t exw on 23 February. Prices increased by INR 200/t d-o-d. Today's index exhibited an optimistic sentiment, with increased price offerings and moderate transaction volumes. Finished steel experienced active buying as prices increased in tandem with volumes.
  
  

Outlook

The pellet market in Raipur is expected to remain volatile in the coming days. However, the market scenario will emerge more clearly after NMDC's price revision for March.