India: PELLEX remains stable, market awaits for NMDC iron ore price revision

• Raipur buyers book actively from Odisha
  
  
• Sponge iron, billet prices decline w-o-w
  
  

Pellet prices in Raipur remained stable in the last couple of days with some moderate deals concluded by steelmakers in this region.

BigMint's bi-weekly domestic pellet (Fe63%) index remained stable at INR 8,800/t ($105/t) DAP Raipur as on 3 September 2024, compared to 30 August. Around 10,000 t of pellets (Fe63%) were sold by pellet producers at INR 9,050/t ($108/t) DAP Raipur. Additionally, Raipur buyers booked around 10,000 t of pellets (Fe62.5%) from Odisha at INR 8,300-8,400/t ($99-100/t) DAP a few days back.

Market sources said that buying interest was seen in the market as proved by the regular inquiries from the buyers while some of them purchased as per their needs. However, some steelmakers booked decent material and waiting for the next price revision from the local sellers.

A further drop in sponge and billet prices w-o-w lowered buyer confidence. However, competitive pellet offers from Odisha attracted the sponge makers and some active transactions were also concluded.

NMDC's iron ore price revision for September delivery is yet to be revised by the miner.

A trader said that local buyers are cautious about concluding deals at current offers and did not purchase large quantities. They are just purchasing need-based materials and opting for a wait-and-watch mode due to bid-offers disparity.

Rationale:

• PELLEX has been derived using data points, i.e., trades, offers, and bids. To download the detailed methodology, click here.
  
  
• Two (2) deals have been reported so far in this publishing window and both have been considered for price calculation and accorded 50% weightage for T1 trade.
  
  
• Twenty-One (21) firm offers, bids, and indicative prices were heard. Sixteen (16) were taken for price calculation and given the balance 50% weightage.
  
  

Factors influencing PELLEX

• Pellet offers stable in Raipur: Raipur-based pellet makers kept their offers stable for Fe 63%(+/_0.5%) at INR 8,900/t ($106/t) exw today compared to the last assessment.
  
  
• Sponge iron prices fall w-o-w: P-DRI prices decreased by INR 300/t ($4/t) w-o-w to INR 24,700/t ($294/t) exw-Raipur on 3 September. However, prices rose by INR 100/t ($1/t) d-o-d today. Moderate buying interest supported sponge prices in the Raipur region today.
  
  
• Billet prices down w-o-w: Billet prices in Raipur declined by INR 550/t ($7/t) w-o-w to INR 38,050/t ($453/t) exw. On a d-o-d basis, billet prices increased by INR 100/t ($1/t) d-o-d. The index showed a slight uptick today, but sentiments in the finished steel segment remained weak, keeping spot prices stable. However, there was a slight improvement in buying activity for semi-finished steel observed across markets in India, supporting spot offers.
  
  

Outlook

According to BigMint's analysis, pellet prices in Raipur are expected to remain volatile following the bid offers disparity. Major buyers are waiting for NMDC's iron ore price declaration..