India: PELLEX remains stable as trades rebound amid improve steel prices

• Market sees active procurement post-Diwali
  
  
• Sponge P-DRI, billet prices rise sharply
  
  

Pellet prices remained stable in the Raipur region, as trading activity picked up post Diwali holiday week. The market was supported by a recent price hike in the sponge iron and semi-finished segment, which spurred buyers to re-enter the market and make fresh deals.

BigMint's bi-weekly domestic pellet (Fe63%) index remained stable at INR 9,950/t ($118/t) DAP Raipur on 8 November compared to the previous assessment on 5 November. Steelmakers actively purchased raw pellets in the last couple of days from local and Odisha-based producers, amid positive downstream steel market sentiments. Deals of around 22,000 t (Fe63-63.5%) were concluded by Raipur producers at INR 9,950-10,550/t ($116-123/t) DAP, in this publishing window. Odisha-based pellet producers sold around 32,500 t of raw pellets (Fe62.5-63%) at INR 9,350-10,000/t ($111-119/t)DAP Raipur in this publishing window.

Producers in Odisha slightly reduced their pellet offers this week to add momentum to trading activity. As buyers began to take advantage of this opportunity, suppliers raised prices back in today's trading session. As per sources, offers from Odisha were recorded at INR 9,600-10,000/t DAP Raipur today.

However, certain steelmakers have mixed views on the current market dynamics. One Raipur steel producer remarked, "Although demand remains strong, prices may decrease soon due to higher supply and a volatile steel market."

In contrast, other steelmakers stated that prices have been firmly supported by bullish trends in the steel market. "Due to the recent increase in steel demand, pellet prices are expected to remain stable or rise slightly," noted a buyer.

Rationale

• PELLEX has been derived using data points, i.e., trades, offers, and bids. To download the detailed methodology, click here.
  
  
• Five (5) deals were reported so far in this publishing window, and three (3) were considered for price calculation. These were accorded 50% weightage for T1 trade.
  
  
• Fifteen (15) firm offers, bids, and indicative prices were heard. Thirteen (13) were taken for price calculation and given the balance 50% weightage.
  
  

Factors driving PELLEX

• Pellet offers stable in Raipur: Raipur-based producers kept their offers for Fe 63% (+/-0.5) pellets stable at INR 9,800-9,900/t ($117-118/t) exw-Raipur.
  
  
• Sponge iron prices rise w-o-w: P-DRI prices increased by INR 900/t ($11/t) w-o-w and INR 450/t ($5/t)d-o-d to INR 26,900/t ($319/t) exw-Raipur on 8 November. Sponge prices were supported by the recent increment in finished steel tags in the central-eastern region.
  
  
• Billet prices up w-o-w: Billet prices in Raipur rose by INR 1,000/t ($11-12/t) w-o-w to INR 40,050/t ($474-475) exw today. Furthermore, d-o-d, prices increased by INR 500/t ($6/t) due to improved sales.
  
  

Outlook

According to BigMint's analysis, pellet prices in Raipur are expected to remain volatile in the coming days with the increased trades. The coming weeks will likely provide further insights into price trends as market participants navigate the evolving post-festival demand scenario.