India: PELLEX remain stable, market activity muted

• Sponge PDRI and billet prices fall w-o-w
  
  
• NMDC cuts iron ore prices for Jan delivery
  
  

The Raipur pellet market remained stable amid weak market sentiments and lack of buying interest. Trade activity remained at a standstill, largely because of the decrease in NMDC's iron ore prices and a decent drop in sponge iron and billet prices in the region, prompting buyers to be more cautious.

BigMint's bi-weekly domestic pellet (Fe63%) index remained unchanged at INR 9,450/t ($110/t) DAP Raipur on 10 January 2025 compared to the previous assessment on 7 January. No deals were reported in Raipur in this publishing window.

Market participants suggest that the price corrections in sponge and semi-finished steel have added to the bearish sentiment. With the recent declines in steel prices, buyers are hesitant to engage in new trades until they see a clearer direction in pricing.

A pellet supplier to Raipur said: "We are closely monitoring the market, but for now, we have decided to keep the offers unchanged. Buyer inquiries dropped post-NMDC iron ore price revision, and no sales were reported from our end."

Raipur-based pellet-makers kept pellet offers for Fe63% (+/_0.5%) stable at INR 9,400/t ($111/t) exw.

A steelmaker informed, "There have been no deals from Odisha-based sellers to Raipur, as their prices remain higher than local offers. Therefore, buyers have chosen local supplies, further contributing to the subdued trading environment."

NMDC decreased list prices of iron ore CLO (calibrated lump ore) and fines by INR 350/tonne (t) ($4/t), effective from 9 January, BigMint learnt from sources. The miner has fixed prices of DR CLO (10-40 mm, Fe 67%) at INR 7,070/t ($82/t) and of iron ore fines (-10 mm, Fe 64%) at INR 5,060/t ($59/t) on FOR basis from its Bacheli complex. Prices include royalty, DMF and NMET charges.

Rationale

• PELLEX has been derived using data points, i.e., trades, offers, and bids. To download the detailed methodology, click here.
  
  
• No deals have been reported so far in this publishing window, and not taken for calculations. Thus, the T1 trade category was accorded 0% weightage and not considered for price calculation.
  
  
• Eleven (11) firm offers, bids, and indicative prices were heard. Nine (9) were taken for price calculation and given the balance 100% weightage.
  
  

Factors driving PELLEX

• Sponge iron prices down w-o-w: P-DRI prices decreased by INR 500/t ($6/t) w-o-w to INR 24,300/t ($283/t) exw-Raipur on 10 January. Meanwhile, prices fell by INR 50/t ($0.5/t) d-o-d today. Subdued buying activity and sluggish movement in the semi-finished and finished steel segments further weakened the demand for sponge iron.
  
  
• Billet prices drop w-o-w: Billet prices in Raipur declined by INR 700/t ($8/t) w-o-w to INR 38,850/t ($452/t) exw today. Furthermore, d-o-d, prices dropped INR 50/t ($0.5/t).
  
  

Outlook

Pellet prices are likely to stay subdued as steelmakers await a price revision from local sellers before proceeding with purchases. If the downstream steel market remains constrained, local pellet producers in Raipur may adjust their offers in the coming week.