India: PELLEX remains stable amid limited deals

• Moderate deals at current offers
  
  
• Stable pellet offers this week
  
  
• Eastern region plants drop pellet offers
  
  

BigMint's bi-weekly domestic pellet (Fe 63%) index remained stable at INR 9,300/t DAP ($112/t) Raipur on 1 March 2024 compared to the last assessment on 27 February. A deal of 10,000 t of pellets was recorded at INR 9,250/t DAP for Fe 63 grade from Raipur in this publishing period.

The pellet market in the Raipur region remained stable in the last two to three days following the same offers from pellet makers. Buyers booked need-based quantity and few negotiations were going on in the market. However, few buyers bids were slightly lower against offers, and deals were not concluded.

A buyer informed, "The pellet offers in Raipur is stable while no improvement seen in the sponge and finished in terms of prices. However, bulk deals were heard in sponge. Few sponge makers already booked enough material at the start of this week while those who had sufficient inventory remained cautious to book material at new offers."

Notably, a few neighbouring region plants offered pellets in Raipur at around INR 400-700/t higher than local plants offers which did not attract buyers.

"The current market is very slow as buyers do not hurry to conclude deals while sellers also keep the same offers. On the other hand, the pellet export market is also under pressure owing to low demand in the seaborne market backed by the sluggish market sentiments", a market participant commented.

Meanwhile, BigMint's India pellet (Fe 63%, 3% Al) export (FOB east coast) index fell by $4/t to $108/t on 28 February 2024. No deals were recorded from the east coast of India in this publishing window. Bid-offers disparity have weighed down pellet deals from India in the last few days.

A pellet maker said: "The drop in lumps offers in Odisha and the pending price declaration of NMDC Chhattisgarh for March delivery kept the market under pressure and the mixed trend was seen in the market. Few buyers inquired at current offers while few bids had remained lower against offers."

Rationale

• PELLEX has been derived using data points, i.e., trades, offers, and bids. To download the detailed methodology Click here.
  
  
• One (1) deal has been reported so far in this publishing window and has been taken into account for price calculation and accorded 50% weightage for T1 trade.
  
  
• Nineteen (19) firm offers, bids, and indicative prices were heard. Fourteen (14) were taken for price calculation and given the balance 50% weightage.
  
  

Market highlights

• Pellet offers unchanged in Raipur: Godawari Power and Ispat Ltd (GPIL) pellet (Fe 63% +/-0.5) offers remained stable INR 9,500/t ($115/t) exw-Raipur on 1 March. Another major pellet maker from Raipur has kept pellet offers stable at INR 9,100-9,200/t ($110-111/t) exw today.
  
  
• Sponge P-DRI stable d-o-d: BigMint's P-DRI (FeM 80%) prices remained largely stable w-o-w at INR 26,250/t exw on 1 March. The assessment for sponge iron in Raipur recorded stable d-o-d today. Bulk deals were witnessed in the Raipur region which kept prices stable.
  
  
• Billet prices fall d-o-d: Billet prices in Raipur fell by INR 150/t d-o-d to INR 39,100/t exw on 1 March. However, prices decreased by INR 150/t d-o-d. After enough buying over the past few days, the index fell, which in turn caused a decline in offerings as buyers were reluctant to make these kinds of purchases.
  
  

Outlook

Pellet prices in the Raipur market are expected to remain range-bound in the coming days. The mixed trend from buyers may keep prices volatile in the near term. NMDC's iron ore price revision is yet to be declared for March 2023 by the miner which will clear the market picture for futures trade and offers.