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India: PELLEX remains stable in recent trades

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Pellets

BigMint Bureau

207 Reads

13 Sep 2024, 20:05 IST

India: PELLEX remains stable in recent trades

Raipur witnesses moderate trading activity

P-DRI prices remain stable, billet prices slide

Pellet prices in Raipur remain unchanged

Pellet offers from Raipur producers remained unchanged in the last couple of days. Moderate trading activity was recorded, as buyers acquired material on a need basis, while major steelmakers remained on the sidelines, making minimal new transactions.

BigMint's bi-weekly domestic pellet (Fe63%) index stood steady at INR 8,650/tonne (t) ($103/t) DAP Raipur as of 13 September 2024, unchanged from 10 September. This week, a Raipur-based pellet maker sold 10,000 t of pellets (Fe63%) at INR 8,750/t DAP Raipur to local buyers. Additionally, Raipur-based traders secured approximately 10,000 t of pellets (Fe62.5%) from Odisha at INR 8,300/t ($99/t) DAP.

As per sources, steelmakers have enough raw material inventories and are not interested in aggressive buying. Buyers made transactions with both local and Odisha producers in the last few days, as Odisha-based plants offered competitive prices, under pressure from low demand from China and a significant drop in international iron ore fines prices.

Neighbouring plants received promising inquiries from buyers in Raipur and Bilaspur, with Fe62.5-63% material priced at INR 8,000-8,400/t ($95-100/t) DAP, unchanged from BigMint's previous assessment.

A sponge iron manufacturer commented, "Raipur-based sellers kept their offers stable, while some plants closed their sales recently after concluding deals. Buying interest was at usual levels, with some deals concluded in the last couple of days. Steady sales were made by Odisha sellers to Raipur buyers, which enabled the former to overcome pressure from the export market. Demand was quite low from local Odisha steelmakers."

Sponge iron prices remained largely stable, while finished steel prices dropped. Buyers wanted to acquire material at prices that were INR 300-400/t lower than the offers made by local producers, but deals were ultimately not finalized.

"Inquiries for pellets were relatively lower in the last 2-3 days. The recent drop in billet and sponge prices has weighed on the tradable volume in the region. We have sufficient material for the next few days, so we did not want to purchase at present offers," a market participant stated.

Rationale

PELLEX has been derived using data points, i.e., trades, offers, and bids. To download the detailed methodology, click here.

Two (2) deal was reported in the publishing window and both considered for price calculation. This was accorded a 50% weightage as T1 trade.

Twenty-one(21) firm offers, bids, and indicative prices were heard. Eighteen (18) were taken for price calculation 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 13 September. A seller concluded transactions at these prices recently.

Sponge iron prices stay firm: P-DRI prices remained stable w-o-w at INR 24,750/t ($295/t) exw-Raipur on 13 September and were unchanged d-o-d today. Participants stayed away from the market amid a lack of buying interest in the finished steel segments.

Billet prices decline w-o-w: Billet prices in Raipur declined by INR 650/t ($8/t) w-o-w to INR 37,300/t ($443/t) exw. However, on a d-o-d basis, billet prices increased by INR 250/t ($3/t). Trade volume remained low today at the higher prices.

Outlook

According to BigMint's analysis, pellet prices in the Raipur region may remain volatile in the coming days. The upcoming Odisha Mining Corporation (OMC) iron ore auction and iron ore price revisions by the National Mineral Development Corporation (NMDC) will decide the market dynamics for the coming days.