India: PELLEX remains stable on limited trades, mixed steel market sentiments

• Pellet offers remain stable in Raipur
  
  
• PDRI and billet prices rise w-o-w
  
  
• Active deals last week limit buying interest this week
  
  

Pellet prices in Raipur have remained stable this week, reflecting consistent offers from local pellet plants. However, Odisha-based producers have introduced a slight price hike. Trade activity has been moderate, with steelmakers opting for need-based purchases.

BigMint's bi-weekly domestic pellet (Fe63%) index remained unchanged at INR 9,950/t ($118/t) DAP Raipur on 12 November compared to the previous assessment on 8 November. Raipur producer concluded a deal of around 15,000 t (Fe63.5%) at INR 10,550/t ($125/t) DAP, in this publishing window. Odisha-based pellet producer sold around 12,000 t of raw pellets (Fe62.5%) at INR 9,800/t ($116/t)DAP Raipur in this publishing window.

Some Odisha-based producers are offering material to Raipur buyers at INR 9,400-10,000/t (Fe62.5-63%) DAP but bulk deals remained absent so far this week.

Demand remained sluggish with mixed market sentiments and sufficient stock purchased last week. Market participants are waiting for clarity on downstream steel prices, while sellers are dispatching material booked in old transactions.

"Most of our dispatches are fulfilling previous deals, and we're maintaining our current offers. The inquiries for the material slightly lower this week as buyers have low confidence amid weak market sentiments." The seller's comments indicate a cautious approach to pricing, aiming to maintain stability despite fluctuations in the market.

"Demand softened this week amid a drop in sponge iron prices and limited trading. We're focusing on managing existing stock rather than increasing purchases." a buyer commented.

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 were considered for price calculation. These were accorded 50% weightage for T1 trade.
  
  
• Sixteen (16) firm offers, bids, and indicative prices were heard. Twelve (12) were taken for price calculation and given the balance 50% weightage.
  
  

Factors driving PELLEX

• Pellet offers stable in Raipur: Raipur-based producers kept their offers for Fe 63% (+/-0.5) pellets stable at INR 9,800-9,900/t ($117-118/t) exw-Raipur.
  
  
• Sponge iron prices rise w-o-w: P-DRI prices increased by INR 400/t ($5/t) w-o-w to INR 26,550/t ($315/t) exw-Raipur on 12 November. However, prices dropped by INR 100/t ($1/t) d-o-d today. Sponge prices remained on a downtrend today with the soft demand in the market and cautious buying approach from the steelmakers.
  
  
• Billet prices up w-o-w: Billet prices in Raipur rose by INR 600/t ($7/t) w-o-w to INR 39,950/t ($473) exw today. Furthermore, d-o-d, prices decreased by INR 150/t ($2/t) due to weak demand and drop in the finished steel prices.
  
  

Outlook

According to BigMint's analysis, Overall, the pellet market in Raipur is experiencing a period of stability, with both buyers and sellers monitoring the market dynamics closely amidst fluctuating steel and sponge iron prices.