India: PELLEX remains stable amid lack of deals

• Bid-offers disparity limits trades in Raipur
  
  
• Buyers remain sidelined in last couple of days
  
  
• Pellet makers keep offers stable despite limited deals
  
  

BigMint's bi-weekly domestic pellet (Fe63%) index remained stable at INR 11,000/t ($132/t) DAP Raipur on 31 May, 2024 compared to the last assessment on 28 May. No deals were recorded in the Raipur region in this publishing window.

The Raipur pellet market remained muted as no trading activity was witnessed in the region following bid-offers disparity and bids remained at INR 700-800/t ($8-10/t) against the sellers' offers. Most of the buyers remained sidelined from the market and did not seem to hurry to purchase material.

GPIL has kept pellet offers of Fe 63.5% and Fe 66% stable at INR 12,000/t ($144/t) and INR 13,500/t ($162/t) exw-Raipur, respectively. Other producers' offers recorded at INR 11,400-11,500/t ($137-138/t) exw.

However, few Odisha-based pellet producers offered raw pellets at the landed prices of INR 10,500-10,800/t (128-129/t) DAP in Raipur. The steelmakers hold their buying due to higher pellet offers and weak prices in the sponge and finished steel commodity.

A trader said: "The significant rise in the pellet offers a couple of days back by the sellers impacted the pellet purchasing. No one has been interested in buying material in the last two or three days after the hike in offers. However, a few buyers inquired about the material, but no one matched the offer-level bids. The upcoming election result to be declared on 4 June also slowed the market movement."

A few more buyers stated that for the next week, the market movement will remain slow and the trading activity may be accelerated. If Raipur's local offers do not drop, then they may purchase material from neighbouring regions, getting landed prices INR 800-1000/t ($10-12/t) cheaper.

Steel market updates

• Sponge P-DRI prices inch down w-o-w: PDRI prices dropped by INR 600/t ($7/t) to INR 28,300/t ($340/t) exw on 31 May. Meanwhile, prices fell by INR 100/t ($1/t) d-o-d. Buyers were active in booking materials yesterday and had placed sufficient orders. However, due to the continuous price increase, buying demand remained limited in today's trading session.
  
  
• Billet prices up w-o-w: Billet prices in Raipur inched up by INR 150/t ($2/t) w-o-w to INR 44,550/t ($534/t) exw, while prices remained stable today on a d-o-d basis. The index remained range-bound throughout the day due to oscillating market sentiments and weak demand, which ultimately dragged offers down by the end of today's trading. Buying activity was limited due to higher offers, as sufficient orders had already been placed over the past few days. Market players decided to wait for market stability before making any more reservations.
  
  

Rationale

• PELLEX has been derived using data points, i.e., trades, offers, and bids. To download the detailed methodology Click here.
  
  
• No deal was reported so far in this publishing window and was not taken into account for price calculation and accorded a 0% weightage for T1 trade.
  
  
• Nineteen (19) firm offers, bids, and indicative prices were heard. Fifteen (15) were taken for price calculation and given the balance 100% weightage.
  
  

Outlook

Pellet prices in Raipur may remain volatile amid a sluggish response from buyers at new offers. However, the market will get clarity in the next week after the general elections result announcement.