SteelMint: PELLEX remains stable, market awaits OMC auction results

SteelMint's bi-weekly domestic pellet (Fe 63%) index, PELLEX, remained unchanged at INR 10,000/tonne (t) DAP Raipur on 17 October, 2023 compared to the last assessment on 13 October. Deals of 10,000 t (Fe63.5%) were recorded at INR 10,450/t DAP Raipur in this publishing window. A big gap was seen between bids and offers amid slow market activity.

As per sources, market activity was comparatively slow amid the festive season and some buyers booked raw pellets on a need basis. Some buyers were approaching the eastern region to get material at lower offers.

According to some buyers, current pellet offers are not untenable as sponge and steel prices are decreasing sharply amid some central sponge makers selling material at lower offers in the local Raipur market. However, buyers are currently waiting for the OMC iron ore auction. Notably, OMC decreased the base price of iron ore fines by INR 100/t and lumps by INR 1,700/t compared to the previous month's auction.

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.
  
  
• Ten (10) firm offers, bids, and indicative prices were heard. Seven (7) were taken for price calculation and given the balance 100% weightage.
  
  

Factors affecting prices

• Raipur pellet offers stable: GPIL has kept pellet (Fe63.5% and Fe66%) offers stable at INR 10,300/t ($124/t) and INR 12,300/t ($148/t) exw-Raipur. Other pellet makers' offers also remained stable at INR 9,900-10,000/t ($116-120/t) exw-Raipur.
  
  
• PDRI prices fall w-o-w: SteelMint's price assessment for sponge PDRI (FeM 80%) in Raipur declined by INR 1,250 /t w-o-w to INR 28,550/t exw on 17 October. Prices fell by INR 300/t d-o-d today. As per sources, steelmakers booked material from the eastern region which has forced local sponge makers to lower their offers.
  
  
• Billet prices fall sharply in Raipur: Billet prices in Raipur fell by INR 1,250/t w-o-w to INR 42,250/t exw on 17 October. Prices fell by INR 400/t d-o-d. The billet index fell significantly today, owing mostly to the aggressive pricing in neighbouring markets, which resulted in a severe price fall in the semi-finished steel segment. Despite lower pricing, consumers continued to actively purchase materials today. This rise in buying activity resulted in a significant increase in the trade volume.