India: PELLEX remains stable amid need-based buying in Raipur

• Market awaits OMC auction results
  
  
• Odisha prices remain uncompetitive
  
  

Pellet prices in Raipur remained stable, with trading activity limited to need-based transactions as market participants exercised caution ahead of the Odisha Mining Corporation (OMC) iron ore auction results. Sellers maintained their offers at similar levels, while buyers showed moderate interest in pellets.

BigMint's bi-weekly domestic pellet (Fe63%) index remained stable at INR 9,400/t ($109/t) DAP Raipur on 17 January 2025 compared to the previous assessment on 14 January. Raipur-based steelmakers concluded around 40,000 t of pellet (Fe63%) deals at INR 9,450-9,650/t ($106-111/t) DAP from local producers.

A steelmaker said, "Local buyers refrained from purchasing material from Odisha due to uncompetitive prices compared to local rates. Offers from Odisha are not favourable when compared to Raipur's local prices, as a result of which no orders have been placed."

Raipur-based pellet-makers kept pellet offers for Fe63% (+/_0.5%) stable at INR 9,400/t ($109/t) exw. A few steelmakers kept away from the market today amid the Makar Sankranti festival which kept sentiments subdued.

The sponge iron and semi-finished steel markets also experienced range-bound pricing this week, reflecting the overall cautious market sentiment. Participants are awaiting clarity on price trends following the OMC auction.

The buyers are doing only need-based deals with small pockets of trades seen in the last few days. Bulk deals are yet to be concluded in the region.

A trader informed, "Market participants are holding back aggressive trades, as the auction results will play a critical role in determining the new tradable price levels.

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 one (1) is taken for calculations. Thus, the T1 trade category was accorded 50% weightage and not considered for price calculation.
  
  
• Twenty (20) firm offers, bids, and indicative prices were heard. Eighteen (18) were taken for price calculation and given the balance 50% weightage.
  
  

Factors driving PELLEX

• Sponge iron prices down w-o-w: P-DRI prices inched down by INR 150/t ($2/t) w-o-w to INR 24,150/t ($282/t) exw-Raipur on 17 January. Meanwhile, prices fell by INR 100/t ($1/t) d-o-d today. Trades remained subdued with only a small quantity of deals concluded.
  
  
• Billet prices fall w-o-w: Billet prices in Raipur dropped by INR 150/t ($1/t) w-o-w to INR 39,000/t ($450/t) exw today. Furthermore, d-o-d, prices decreased by INR 100/t ($1/t). Buying activity continued to be limited, with sentiments in the finished steel segment offering little support. The overall market was cautious and subdued throughout the day.
  
  
• Pellet export up w-o-w: India pellet (Fe 63%, 3% Al) export index (FOB east coast) rose by $9/t w-o-w to $103/t on 17 January. India-based pellet maker concluded around 50,000 t of the pellet (Fe 63%, 8% Sl2O3+SiO2) export deal through tender at $109-110/t FOB India recently. Few more deals were heard through coastal movement in both export and Indian domestic market.
  
  

Outlook

According to BigMint analysis, pellet prices are likely to be clearer next week as market participants expect a new tradable level post-OMC auction result.