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India: PELLEX falls INR 350/t ($4/t); moderate deals concluded at fresh offers

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Pellets

BigMint Bureau

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22 Nov 2024, 20:17 IST

India: PELLEX falls INR 350/t ($4/t); moderate deals concluded at fresh offers

Pellet offers fall INR 400/t ($5/t) in Raipur

Higher offers heard from Odisha-based sellers

Pellet prices in Raipur have significantly declined in recent days, largely due to the recent auction results of Odisha Mining Corporation (OMC) and price reductions by local producers. Buyers have concluded some deals at revised prices.

BigMint's bi-weekly domestic pellet (Fe63%) index decreased by INR 350/tonne ($4/t) to INR 9,350/t ($110/t) DAP Raipur on 22 November compared to the previous assessment on 19 November. Raipur-based pellet sellers concluded around 40,000 t of pellet deals (Fe63/63.5%) at revised offers of INR 9,000-9,600/t ($107-114/t) exw in this publishing window. Another deal of 20,000 t of Fe65.5% pellets was recorded at INR 10,800/t ($128/t) exw recently.

Some Odisha-based producers are offering material to buyers in Raipur at INR 9,000-9,600/t (Fe62.5-63%) DAP but failed to conclude any deals amid wide offer gaps with local sellers.

A market participant commented: "Local sellers have reduced offers after observing a sharp drop in bids at OMC's auction and a growing bid-offer disparity. Some moderate deals were concluded at new offers as inquiries have increased from buyers over the past couple of days."

A steelmaker from Raipur informed: "Lower bids in the auction signalled softening demand, leaving no choice but to adjust our prices to remain competitive. Additionally, buyers in Raipur have shown a preference for local procurement due to higher delivered prices from neighbouring regions."

NMDC conducted an auction for 321,600 t of iron ore from Chhattisgarh on 21 November. As per sources, out of 12,000 t of sized lump (10-20 mm, Fe 65.5%), 8,000 t was sold at base prices of INR 6,860/t and the rest of the material remained unsold amid weak buying interest from steelmakers. Prices were on FOR basis, including royalty, DMF, and NMET.

Rationale

PELLEX has been derived using data points, i.e., trades, offers, and bids. To download the detailed methodology, click here.

Two (2) deals have been reported so far in this publishing window and both considered for price calculation. These were accorded 50% weightage for T1 trade.

Sixteen (16) firm offers, bids, and indicative prices were heard. Nine (9) were taken for price calculation and given the balance 50% weightage.

Factors driving PELLEX

Pellet offers fall in Raipur: Raipur-based pellet makers reduced their Fe63% (+/_0.5%) offers on 21 November by INR 400/t ($5/t) to INR 9,000-9,100/t ($107-108/t) exw. GPIL lowered Fe63.5% and Fe65.5% offers to INR 9,600/t ($114/t) and INR 10,800/t ($128/t) exw.

Sponge iron prices drop w-o-w: P-DRI prices sharply decreased by INR 150/t ($2/t) w-o-w to INR 25,350/t ($299/t) exw-Raipur on 22 November. Meanwhile, prices remained stable d-o-d today.

Billet prices up w-o-w: Billet prices in Raipur increased by INR 400/t ($5/t) w-o-w to INR 39,400/t ($467) exw today. However, d-o-d, prices decreased by INR 150/t ($2/t). The index experienced a marginal correction today, primarily impacted by fluctuating market sentiments and weak demand in the semi-finished steel segment. Buyers largely refrained from making purchases amid bearish market conditions and sufficient bookings already concluded in yesterday's trading session, reflecting subdued activity across segments d-o-d.