India: PELLEX remains stable in recent deals

• Active deals heard this week
  
  
• Pellet offers remain stable
  
  
• Clearer picture to emerge after NMDC price revision
  
  

BigMint's bi-weekly domestic pellet (Fe 63%) index remained stable at INR 9,300/t DAP ($112/t) Raipur on 27 February 2024 compared to the last assessment on 23 February. Total deals of 35,000 t of pellets were recorded at INR 9,250-9,650/t DAP for Fe 63/63.5% grade from Raipur in this publishing period.

The Raipur pellet market saw active bookings this week as buyers conducted bookings based on needs. However, pellet prices remained stable in the region despite the sharp w-o-w decline in global iron ore fines and domestic sponge iron prices.

BigMint's P-DRI (FeM 80%) prices fell by INR 400/t w-o-w at INR 26,100/t exw on 27 February. The assessment for sponge iron in Raipur inched down by INR 50/t d-o-d today. Cautious approach by buyers along with the continuous decline in prices, appeared to have influenced buying decisions, resulting in muted market activity.

A buyer source informed, "Sponge iron offers decreased compared to last week but pellet makers had already reduced offers last week".

A market observer said, "Pellet offers in the seaborne market decreased sharply which may impact domestic prices in the coming days. Over the past few days, demand was already on the lower side while this drop in export offers will create selling pressure in the domestic market."

Iron ore (Fe 62%) fines spot prices dipped $13/t w-o-w to $116/t CFR China on 26 February. Iron ore prices fell due to low steel mill margins, sluggish blast furnace production recovery, and subdued demand.

Following the current market scenario, a pellet producer said that enquiries from buyers improved this week. However, new offers are expected after NMDC Chhattisgarh's price revision for March delivery.

Rationale

• PELLEX has been derived using data points, i.e., trades, offers, and bids. To download the detailed methodologyClick here.
  
  
• Three (3) deals have been reported so far in this publishing window and two (2) have been taken into account for price calculation and accorded 50% weightage for T1 trade.
  
  
• Eleven (12) firm offers, bids, and indicative prices were heard. Eight (8) 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) remained stable INR 9,500/t ($115/t) exw-Raipur on 27 February. Another major pellet maker from Raipur has kept the pellet offers stable at INR 9,100-9,200/t ($110-111/t) exw today.
  
  
• Billet prices down: Billet prices in Raipur decreased by INR 150/t d-o-d to INR 39,150/t exw on 27 February. Similarly, prices increased by INR 150/t d-o-d. The index fell amid restrained demand in the market, causing downstream enquiries to push prices lower. Notably, buying activity also remained subdued.
  
  

Outlook

Pellet prices in the Raipur market may remain range-bound in the coming days after NMDC's price revision.