India: PELLEX remains stable in recent deals
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- Sponge P-DRI and billet prices increase w-o-w
- Pellet offers may see change post OMC auction
- Deal activity remains moderate in Raipur region
BigMint's bi-weekly domestic pellet (Fe 63%) index, PELLEX, remained stable at INR 8,600/tonne ($102/t) DAP Raipur as of 20 September 2024. A Raipur-based seller sold 9,000 t of pellets (Fe63%) at INR 8,500/t ($102/t) exw in the current publishing window. In another deal, a buyer bought around 10,000 t of pellets (Fe 62.5%) from Odisha at INR 8,300-8,400/t DAP Raipur.
According to sources, prices of sponge iron and billets have shown some upward trends this week, which boosted market confidence for new pellet purchases. However, steelmakers have chosen to adopt a wait-and-watch approach for the next couple of days to observe market dynamics.
"Steelmakers' buying interest has increased due to improved sponge iron prices and a positive response in the ongoing OMC auction. Positive market sentiments are expected next week, with aggressive trades anticipated from local buyers. Transactions have been made at the current offers," a local pellet producer stated.
In National Mineral Development Corporation (NMDC) Chhattisgarh's auction from the Bacheli mines, held on 17 September, steelmakers purchased 30,000 t of fines (Fe 64%) at a base price of INR 4,650/t. Around 21,500 t of DRCLO (10-40 mm, Fe 67%) and 10,000 t of Baila ROM (10-150 mm, Fe 65.5%) were booked at INR 6,776/t and INR 5,367/t, respectively. Prices were on FOR basis and included royalty, DMF, and NMET.
Rationale
- PELLEX has been derived using data points, i.e., trades, offers, and bids. To download the detailed methodology, click here.
- Two (3) deals were reported in the publishing window, and all were considered for price calculation. These were accorded 50% weightage as T1 trades.
- Sixteen (16) firm offers, bids, and indicative prices were heard. Twelve (12) were taken for price calculation as T2 inputs and given the balance 50% weightage.
Factors influencing PELLEX
- Pellet offers remain stable: Raipur-based pellet makers kept their offers for Fe 63% (+/- 0.5%) stable at INR 8,600/t ($102/t) exw-Raipur as of 20 September. A seller kept sales on hold this week to complete delivery for previous deals.
- Sponge iron prices rise w-o-w: P-DRI prices increased by INR 800/t w-o-w to INR 25,550/t ($298/t) exw-Raipur on 20 September. Meanwhile, P-DRI prices remained stable d-o-d today. Transaction volumes increased significantly as a result of the active engagement in the market today.
- Billet prices up w-o-w: Billet prices in Raipur rose by INR 900/t w-o-w to INR 38,200/t ($444/t) exw. However, on a d-o-d basis, billet prices inched up by INR 50/t ($0.5/t). Moderate trades were recorded today amid improved demand from buyers.
Outlook