India: PELLEX remains stable in recent deals

• Around 35,000 t pellet deals by Raipur plants
  
  
• Sponge makers' active pellet buying to maintain inventory
  
  
• Mixed market sentiments in sponge, billets this week
  
  

The pellet market in the Raipur region improved this week as buyers booked decent material at reduced prices. Need-based quantity concluded by the sponge makers to maintain the inventory during rainy season. However, limited deal was recorded from neighbouring regions for Raipur following the early delivery by the local plants.

BigMint's bi-weekly domestic pellet (Fe63%) index remained stable at INR 8,900/t ($108/t) DAP Raipur on 26 July, 2024 compared to the last assessment on 23 July. The active deals in the last couple of days supported the index.

Around 35,000 t of raw pellet (Fe63%) deals were concluded in Raipur from the last two to three days at INR 8,950/t DAP Raipur by the pellet producers. Notably, around 135,000 t pellet deals were recorded this week post-price reduction by the Raipur pellet plants.

A sponge producer said, "Despite drop in sponge and finished steel prices, there was an active pellet buying this week. The first two to three weeks of July have seen lower trades, which encouraged buyers to maintain their inventory of feedstock. Sellers offered competitive prices from the Odisha region, but major buyers preferred to purchase pellets from local plants."

Meanwhile, major producers from Odisha recorded their offers at INR 8,500-8,800/t DAP Raipur for Fe62.5% pellets. Limited active deals were recorded from the Odisha region for Raipur in the last few days as local steelmakers booked from Raipur plants.

Rationale:

• PELLEX has been derived using data points, i.e., trades, offers, and bids. To download the detailed methodology Click here.
  
  
• Three (3) deals have been reported so far in this publishing window and all were considered for price calculation and accorded a 50% weightage for T1 trade.
  
  
• Twenty one (21) firm offers, bids, and indicative prices were heard. Fifteen (15) were taken for price calculation and given the balance 50% weightage.
  
  

Factors driving PELLEX

• Raipur pellet offers stable: Raipur-based pellet makers have kept their offers stable at INR 8,800-8,900/t ($105-106/t) exw-Raipur today. However, a prominent pellet producer opted for the maintenance shutdown till this weekend after some successful transactions.
  
  
• Sponge iron prices up INR 150/t d-o-d: P-DRI prices rose by INR 150/t d-o-d to INR 25,250/t ($302/t) exw-Raipur on 26 July. However, w-o-w, prices dropped by INR 200/t ($2.5/t) compared to yesterday. Moderate deals were recorded in Raipur with recovery in the prices in the second trading session.
  
  
• Billet prices drop INR 450/t w-o-w: Billet prices in Raipur dropped by INR 450/t ($5/t) w-o-w to INR 38,450/t ($458/t) exw today, while prices inched down by INR 50/t ($0.5/t) d-o-d. The index remained range-bound today despite the drop in the sponge prices.
  
  

Outlook

According to BigMint's analysis, pellet prices in Raipur are anticipated to remain stable in the coming days, as sellers are not currently experiencing any selling pressure.