India: PELLEX remains stable w-o-w on sluggish trade

• Buyers continue to procure pellets from Odisha
  
  
• P-DRI prices remain stable, billet prices slide
  
  
• Pellet prices in Raipur may remain under pressure
  
  

A sponge iron manufacturer commented: "Buying interest for raw pellets remained sluggish this week, as major buyers had already purchased sufficient material in recent days. The lack of improvement in sponge and billet prices has further dampened market confidence regarding raw material inventory."

"Market participants have slowed down their procurement due to sufficient stocks and limited sponge iron trades. However, there have been some aggressive purchases in the last few days. We are receiving inquiries for pellets, but the counter bids are lower than the offers from the steelmakers. Considering production costs and recent trends in iron ore prices, we have kept our offers stable and are waiting to conclude deals," a pellet producer from a neighbouring region said.

Rationale

• PELLEX has been derived using data points, i.e., trades, offers, and bids. To download the detailed methodology, click here.
  
  
• One (1) deal was reported in the publishing window, and considered for price calculation and accorded a 50% weightage for T1 trade.
  
  
• Twenty-five(25) firm offers, bids, and indicative prices were heard. Twenty-one (21) were taken for price calculation and given the balance 50% weightage.
  
  

Factors influencing PELLEX

• Pellet offers stable in Raipur: Raipur-based pellet makers have kept their offers for Fe 63% (+/- 0.5%) stable at INR 8,600/t ($102/t) ex-works Raipur as of 10 September. Sales from local sellers have been absent so far this week.
  
  
• Sponge iron prices stable w-o-w: P-DRI prices remained stable w-o-w at INR 24,700/t ($294/t) exw-Raipur on 10 September. However, prices edged up by INR 50/t ($0.5/t) d-o-d today. The decline in sponge iron prices was fuelled by lacklustre demand in the downstream market. Buyers were reluctant to make purchases and opted to await further market adjustments.
  
  
• Billet prices decline w-o-w: Billet prices in Raipur declined by INR 600/t ($7/t) w-o-w to INR 37,450/t ($445/t) exw. However, on a d-o-d basis, billet prices decreased by INR 250/t ($3/t). The index showed a downtrend amid a lack of buying confidence among end-users, and trade activity remained low.
  
  

Outlook