India: PELLEX inches up amid active trades

• Pellet export, sponge PDRI, billet tags up w-o-w
  
  
• Inquiries increase but buyers remain cautious
  
  

Pellet prices in the Raipur region witnessed an uptrend over the past couple of days, as some active deals were observed, though market participants largely continued to engage in need-based procurement. Market sentiment was bolstered by recent improvements in sponge iron and billet prices, coupled with positive cues from the pellet export market.

BigMint's bi-weekly domestic pellet (Fe63%) index inched up by INR 100/t ($1/t) to INR 9,500/tonne (t) ($110/t) DAP Raipur on 24 January 2025 compared to the previous assessment on 21 January. A Raipur-based seller concluded deals for around 75,000 t of pellets (Fe63%) at INR 9,450-9,650/t ($110-112/t) DAP in the last couple of days.

Pellet makers in the region kept offers for Fe63% (+/_0.5%) stable at INR 9,300-9,500/t ($108-110/t) exw. Few Odisha-based sellers offered raw pellets (Fe62.5-63%) at INR 9,200-9,600/t ($107-111/t) DAP Raipur, but deals have not yet been concluded, as local offers were more attractive for buyers. Notably, some Raipur-based suppliers kept sales on hold, stating that they were focusing on dispatching previously booked orders.

A seller commented, "The market has been receiving regular inquiries due to the limited availability of material from Odisha. Additionally, our plant is not under any selling pressure, allowing us to maintain firm pricing."

A market participant informed, "Improved market confidence has encouraged inquiries, but buyers have remained cautious, given uncertainties surrounding market dynamics in the near future. We are closely monitoring the situation before finalising deals, as there is still a disparity between bid and offer prices."

Few sources highlighted that demand from coastal trades and the export market supported local pellet prices, leading to optimism among sellers. However, buyers were largely reluctant to conclude deals without clarity on price stability.

Rationale

• PELLEX has been derived using data points, i.e., trades, offers, and bids. To download the detailed methodology, click here.
  
  
• Four (4) deals have been reported so far in this publishing window and have been taken for calculations. Thus, the T1 trade category was accorded 50% weightage.
  
  
• Eighteen (18) firm offers, bids, and indicative prices were heard. Ten (10) were taken for price calculation and given the balance 50% weightage.
  
  

Factors driving PELLEX

• Sponge iron prices up w-o-w: P-DRI prices rose by INR 250/t ($3/t) w-o-w to INR 24,400/t ($283/t) exw-Raipur on 24 January. Meanwhile, prices climbed up by INR 150/t ($2/t) d-o-d today. Some need-based trades were concluded in Raipur at higher offers, which boosted market confidence.
  
  
• Billet prices rise w-o-w: Billet prices in Raipur increased by INR 300/t ($3.5/t) w-o-w to INR 39,000/t ($452/t) exw today. Furthermore, d-o-d, prices moved up by INR 250/t ($3/t). The billet index rose today, as sellers increased spot offers despite a turbulent market. However, spot buying was weak, with buyers looking for more confidence in the sustainability of the pick-up in steel trades, particularly in finished steel. Participants remained cautious despite the rising price trend.
  
  
• Pellet export prices supportive w-o-w: India's pellet (Fe 63%, 3% Al) export index (FOB east coast) remained stable w-o-w at $103/t on 24 January. Some active deals were concluded in the Indian Ocean, and there was strong buying interest ahead of the Chinese Lunar New Year holidays. Indian producers sold over 200,000 t of pellets in the overseas market at decent prices this week.
  
  

Outlook

According to BigMint's analysis, the Raipur pellet market is expected to remain stable in the short term, with both sellers and buyers treading carefully amid mixed sentiments and evolving market conditions.