SteelMint: PELLEX edges up amid supportive market sentiments

SteelMint's bi-weekly domestic pellet (Fe 63%) index, PELLEX, increased marginally by INR 50/tonne (t) to INR 9,350/tonne (t) DAP Raipur on 10 November, 2023 compared to the last assessment on 7 November. Deals of around 44,000 t were recorded at INR 9,250-9,550/t DAP Raipur in this publishing window.

Active pellet bookings for exports recently, rise in semi-finished steel and sponge prices supported pellet prices. Buyers in the region concluded decent deals over the last one week on declining prices. However, they are still not buying in bulk and only on need basis in the festive season.

However, OMC's auction is round the corner and buyers are keen. Similarly, the market is awaiting NMDC's price revision, although it is still awaited.

As per sources, prices are still stable before the festival but finished steel demand is still uncertain amid Assembly elections. Therefore, OMC's auction will be the market barometer in the days to come.

Rationale:

• PELLEX has been derived using data points, i.e., trades, offers, and bids. To download the detailed methodology Click here..
  
  
• Four (4) deals were reported so far this week and taken into account for price calculation and accorded 50% weightage for T1 trade.
  
  
• Six (6) firm offers, bids, and indicative prices were heard. Five (5) were taken for price calculation and given the balance 50% weightage.
  
  

Factors supporting pellet prices?

• Active export bookings: This week pellet makers remained active in export bookings from central India and around 110,000 t of deals were recently concluded. This has provided support to domestic offers as well. SteelMint's India pellet export (FOB east coast) index increased by $6/t w-o-w on 8 Nov'23. Around 0.63 mnt deals of pellet exports were recorded by SteelMint from India in the last one week.
  
  
• PDRI prices remain stable w-o-w: SteelMint's price assessment for sponge P-DRI (FeM 80%) in Raipur remained unchanged at INR 27,550/t exw on 10 November. However, prices increased d-o-d by INR 350/t. Prices continued to rise as buying interest among participants remained active throughout the day. Sources informed SteelMint that on the occasion of Dhanteras, spot purchase enquiries increased, followed by rising steel prices across regions, nudging producers to float offers at higher levels. Bulk bookings were seen in different regions today.
  
  
• Raipur billet prices inch up w-o-w: Billet prices in Raipur remained stable w-o-w to INR 41,550/t exw on 10 November. On the other hand, prices rose significantly by INR 350/t, d-o-d.
  
  

Outlook

Pellet prices are expected to remain firm in the coming days as decent export bookings are happening from central India. However, the Diwali festival and Assembly elections in the state might impact the pellet market.