India: PELLEX remains stable after recent deals

• Raipur producers conclude transactions at current offers
  
  
• Pellet prices receive support from DRI and semis
  
  

Pellet prices in Raipur remained firm over the past few days as trading activities picked up momentum. Buyers focused on bookings to fulfil their immediate raw material inventory requirements which supported trade volumes in Raipur.

BigMint's bi-weekly domestic pellet (Fe63%) index remained unchanged at INR 9,550/t ($112/t) DAP Raipur on 3 January compared to the previous assessment on 31 December. Pellet producers sold around 32,000 t at INR 9,550-9,650/t ($112-113/t) DAP Raipur. Another deal of 10,000 t was heard at INR 9,550/t ($108/t) DAP but is yet to be confirmed from the sellers' end.

Notably, pellet producers in Raipur are processing orders at current prices due to the unavailability of sourcing material from Odisha. No deals between Odisha suppliers and Raipur buyers have been recorded in the past few weeks.

A market participant commented: "The increase in sponge iron (PDRI) and billet prices over the past week lent support to the earlier hike in pellet prices. Market participants noted that the price rise aligns with the improve trend in the steel segment. However, it was observed that some buyers refrained from new bookings, citing pending deliveries from earlier deals and resistance to higher price levels."

Raipur-based pellet-makers kept stable offers for pellet Fe 63% (+/_0.5%) at INR 9,400-9,500/t ($111-112/t) exw. Overall, Raipur's pellet market shows resilience with expectations of stronger trading in the near term.

A Raipur-based trader informed, "The current stability in prices provides confidence to buyers, and we expect trading volumes to increase in the coming days if the steel market sustains its northward trajectory."

Looking ahead, market participants expressed optimism about trade activities gaining pace if steel prices continue to trend upwards.

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 have been taken for calculations. Thus, the T1 trade category was accorded 50% weightage and not considered for price calculation.
  
  
• Sixteen (16) firm offers, bids, and indicative prices were heard. Fourteen (14) were taken for price calculation and given the balance 50% weightage.
  
  

Factors driving PELLEX

• Sponge iron prices up w-o-w: P-DRI prices increased by INR 400/t ($5/t) w-o-w to INR 24,800/t ($289/t) exw-Raipur on 3 January. Meanwhile, prices are downward by INR 100/t ($1/t) d-o-d today. Moderate trading activity in the Raipur market today for sponge as participants are ex[expecting some downtrend in prices.
  
  
• Billet prices increase w-o-w: Billet prices in Raipur rose by INR 650/t ($8/t) w-o-w to INR 39,550/t ($463/t) exw today. Furthermore, d-o-d, prices dropped by INR 200/t ($2.5/t). buying activity remained limited due to variations in offers, as market participants approached transactions cautiously.
  
  

Outlook

Pellet prices are expected to remain volatile in the coming days with the expectation of increasing trading activity.

*Correction: Feature image date has been updated.