India: PELLEX remains stable amid mixed market sentiments

• NMDC hikes iron ore CLO, fines prices for Oct
  
  
• Sponge, billet tags drop by over INR 1,000/t
  
  

Pellet prices in Raipur, India, remained stable in the past couple of days amid fluctuations in market sentiments. While the National Mineral Development Corporation (NMDC) raised iron ore prices on the other hand sponge iron and semi-finished steel dropped by over INR 1,000/t this week. These opposing trends led to wariness among buyers, especially with the Diwali festival approaching, as prevailing prices are not considered favourable for purchasing raw pellets due to weak demand for finished steel.

BigMint's bi-weekly domestic pellet (Fe63%) index remained stable at INR 10,500/t ($125/t) DAP Raipur on 25 October compared to the previous assessment on 22 October. No deals were recorded in this publishing window amid weak buying interest.

Some producers from Odisha offered pellets (Fe62.5-63%) at INR 9,900-10,500/t ($123-127/t) DAP to buyers in Raipur, but no bulk deals were struck due to differences in bids and offers. Initially, Raipur buyers had sought material from Odisha, as local prices were higher, but they were unwilling to raise bids beyond INR 9,500/t ($113/t). Ultimately, deals could not be finalised due to bid-offer discrepancies.

Steelmakers expect subdued market dynamics through the festive season, with steady offers and no trades. "Buyers are under wait and watch mode especially amid Diwali approaching. With limited buying interest, prices are expected to remain stable in the short term," a steelmaker noted.

Sponge P-DRI prices dropped sharply by INR 1,300/t ($17/t) w-o-w to INR 26,250/t ($312/t) exw-Raipur on 25 October. Meanwhile, prices inched up by INR 50/t ($0.5/t) d-o-d. Furthermore, billet tags in Raipur declined by INR 1,600 ($19/t) w-o-w to INR 39,400/t ($470/t) exw and rose by INR 50/t ($0.5/t) d-o-d.

NMDC raised the prices of CLO and fines by INR 700/t ($8) and INR 400/t ($5), respectively, effective from 23 October. The company has set the prices of DR CLO (10-40 mm, Fe67%) at INR 7,420/t ($88/t) and iron ore fines (-10 mm, Fe64%) at INR 5,410/t ($64/t) on a FOR basis from its Bacheli complex.

Pellet offers stable in Raipur: Raipur-based pellet makers kept their offers stable for iron ore Fe63% (+/_0.5%) at INR 10,400-10,500/t ($124-125/t) exw. Godawari Power and Ispat (GPIL) opened pellet offers for Fe63% and Fe65% grades at INR 11,000/t ($131/t) and INR 12,200/t ($145/t) exw, respectively.

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 in this publishing window and taken into account for price calculation and accorded a 0% weightage for T1 trade.
  
  
• Twenty-two (22) firm offers, bids, and indicative prices were heard. Seventeen (17) was taken for price calculation and given the balance 100% weightage.
  
  

Outlook

Pellet prices in Raipur are expected to remain stable, as sellers are maintaining their offers ahead of the Diwali festival. Buyer and seller both under wait and watch mode.