India: PELLEX inches up, market awaits OMC's iron ore auction

• Pellet market silent in Raipur
  
  
• Pellet offers drop in Odisha
  
  

BigMint's bi-weekly domestic pellet (Fe 63%) index inched up by INR 50/t to INR 9,200/t DAP ($109/t) Raipur on 15 March 2024 compared to the last assessment on 12 March. No deals were recorded in this publishing window due to a slow market activity coupled with downtrend pellet export market.

The local pellet plants from Raipur remained stable this week. Godawari Power and Ispat Ltd (GPIL) has kept pellet offers stable at INR 9,400-9,500/t ($113-114/t) exw-Raipur. Other major pelletmakers' offers from Raipur have also remained stable at INR 9,100-9,200/t ($109-110/t) exw.

The pellet market in Raipur faced challenges as no trading activities were witnessed in the last two to three days. Most of the buyers remained silent amid fluctuations in prices and few were waiting for the price drop as considering current offers too high.

A buyer said: "We are waiting for the offer revision by pellet plants. The current offers are not accepted by the market as no one is booking the material. I heard that some drop was seen in the Odisha pellet prices so we can expect the price drop in Raipur also."

The Odisha pellet price dropped by INR 200-300/t recently due to bid-offer disparity and a steep fall in export bookings due to a fall in global iron ore prices. BigMint's India pellet (Fe 63%, 3% Al) export index (FOB east coast) decreased by $7.5/tonne (t) to $97.5/t on 13 March 2024.

Another market observer said that as per the last few year's trends, the participants try to avoid bulk booking in the last phase of the financial year-end. Few buyers have enough stock for the next few days, that is why transaction volumes of pellets have decreased in Raipur.

Market highlights

• Sponge P-DRI stable w-o-w: BigMint's P-DRI (FeM 80%) prices decreased by INR 550/t w-o-w to INR 26,250/t exw on 15 March. Meanwhile, the assessment for sponge iron in Raipur fell by INR 150/t d-o-d yesterday.
  
  
• Billet prices fell w-o-w: Billet prices in Raipur also fell by INR 600/t w-o-w to INR 39,400/t exw on 15 March. However, prices decreased by INR 200/t d-o-d. This downturn was attributed to negative sentiments prevailing in the semi-finished steel market, causing a slowdown in offers.
  
  

Rationale

• PELLEX has been derived using data points, i.e., trades, offers, and bids. To download the detailed methodology Click here.
  
  
• No deals were reported so far in this publishing window and were not taken into account for price calculation and accorded 0% weightage for T1 trade.
  
  
• Ten (10) firm offers, bids, and indicative prices were heard. Seven (7) were taken for price calculation and given the balance 100% weightage.
  
  

Outlook

Pellet prices in the Raipur market are expected to remain volatile in the coming days as buyers opted a cautious mode while sellers also not revised the prices. The market participants are waiting for OMC auction which is scheduled in the next week and the trend will be clearer after the auction.