SteelMint: PELLEX remains stable amid soft steel demand

SteelMint's bi-weekly domestic pellet (Fe 63%) index, PELLEX, remained stable at INR 10,100/tonne (t) DAP Raipur on 10 October, 2023 compared to the last assessment on 6 October. Deals of 30,000 t were at INR 10,450/t DAP Raipur in this publishing window.

Pellet-makers in Raipur cut prices by INR 200/t yesterday, as buyers had booked material from Odisha at competitive prices.

As per sources, the market is slow due to low finished steel demand which impacted pellet and sponge prices at the start of this week. However, some buyers booked material to meet immediate needs.

Some buyers are in wait-and-watch mode and observing the market flow. Except south India, pellet prices have seen a downtrend in all other regions of India.

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 so far this week but not taken into account for price calculation and accorded 0% weightage for T1 trade.
  
  
• Twelve (12) firm offers, bids, and indicative prices were heard. Nine (9) were taken for price calculation and given the balance 100% weightage.
  
  

Factors driving prices

• Raipur pellet offers fall: GPIL has decreased pellet (Fe63.5% and Fe66%) offers by INR 200/t ($2/t) to INR 10,300/t ($124/t) and INR 12,300/t ($148/t) exw-Raipur. Other pellet-makers have also decreased offers by INR 200/t to INR 9,900-10,000/t ($119-120/t) exw-Raipur.
  
  
• PDRI prices fall w-o-w: SteelMint's price assessment for sponge PDRI (FeM 80%) in Raipur inched down by INR 100 /t w-o-w to INR 29,800/t exw on 10 October. Prices fell by INR 250/t d-o-d today. Prices decreased due to weak spot market mood and few buying enquiries. However, central India was an exception, which saw bulk bookings at lower offers.
  
  
• Billet prices stable in Raipur: Billet prices in Raipur remained largely stable w-o-w at INR 43,000/t exw on 10 October. However, prices fell by INR 450/t d-o-d. Today's sharp drop in SteelMint's billet index was due to sluggish demand for semi-finished steel. Poor demand and slow growth in the finished steel market are to blame for the current slowdown.