India: PELLEX remains firm in recent trade amid supportive market sentiments

• Pellet offers by Raipur producers remain unchanged
  
  
• Sponge iron, billet prices increase w-o-w
  
  
• Odisha-based suppliers gain edge due to competitive offer
  
  

BigMint's bi-weekly domestic pellet (Fe63%) index remained stable at INR 10,200/t ($121/t) DAP Raipur on 8 October 2024 compared to the previous assessment on 4 October. During this publishing window, Raipur-based pellet producers sold around 20,000 t of pellets (Fe63-63.5%) at INR 10,200-10,500/t ($121-125/t) exw. Additionally, Odisha-based sellers concluded deals of around 25,000 t of pellets (Fe62.5-63%) at INR 9,600-10,000/t ($114-119/t) DAP Raipur.

Prices of pellets in Raipur have remained stable, with moderate trading activity seen. Producers based in Raipur have kept their offers stable compared to last week. However, one of the major pellet producers in Raipur under maintenance shut down for the next few weeks. Positive sentiments in the sponge iron and billet segments have boosted buying confidence.

The steelmakers are still buying pellets from local and nearby regions to maintain their raw material inventory. According to sources, major steelmakers purchasing pellets from Odisha at INR 10,000/t ($119/t) DAP level.

A pellet producer in Raipur stated that his company has been selling at unchanged offers and are receiving active inquiries from buyers. The recent surge in sponge and billet prices, driven by increased demand, has significantly boosted market liquidity.

Though market pellet market in India eagerly waiting for Chinese market response for the next few days and that probably to some extent the deciding factor for domestic prices. However, hike in domestic iron ore prices also kept the pellet prices supported across the regions.

Factors driving PELLEX

• Pellet offers stable in Raipur: Raipur-based manufacturers kept their offers for Fe 63% (+/- 0.5%) pellets at INR 10,200-10,300/t ($121-123/t) exw-Raipur. However, one producer desisted from selling today, planning a maintenance shutdown in the coming days.
  
  
• Sponge iron prices surge w-o-w: P-DRI prices rose INR 700/t ($9/t) w-o-w to INR 28,800/t ($343/t) exw-Raipur on 8 October. Meanwhile, prices decreased by INR 100/t ($1/t) d-o-d. Deals remained absent today amid mixed market sentiments. Buyers opted to wait-and-watch.
  
  
• Billet prices increase w-o-w: Billet prices in Raipur climbed up by INR 850/t ($10/t) w-o-w to INR 41,950/t ($500/t) exw, while remaining stable d-o-d. The index remained stable today with few deals concluded. However, trading activity slowed down in the Raipur region today.
  
  

Rationale

• PELLEX has been derived using data points, i.e., trades, offers, and bids. To download the detailed methodology, click here.
  
  
• Five (5) deals were reported in this publishing window, and three (3) were taken into account for price calculation and accorded a 50% weightage for T1 trade.
  
  
• Seventeen (17) firm offers, bids, and indicative prices were heard. Fourteen (14) were taken for price calculation and given the balance 50% weightage.
  
  

Outlook

Pellet prices in Raipur are expected to stay firm in the near term because transactions are getting concluded at current levels. The momentum in the market may sustain due to decent demand being witnessed from buyers.