SteelMint: PELLEX remains stable, trades slow down amid festive season

SteelMint's bi-weekly domestic pellet (Fe 63%) index, PELLEX, remained stable at INR 10,000/tonne (t) DAP Raipur on 20 October, 2023 compared to the last assessment on 17 October. No deals were recorded in this publishing window. Eastern region pellet makers, on the other hand, offered materials in Raipur at competitive prices.

As per sources, low demand for raw pellets was seen in the Raipur market amid the festive season. Some buyers opined that raw pellet offers were high given the prevailing sponge and finished steel prices.

Buyers remained on sidelines and are expecting some price cuts from local Raipur pellet producers. The upcoming assembly election in Chhattisgarh may also impact the pellet and sponge market for the next few days.

Notably, sponge and billet prices decreased in Raipur by INR 1,000/t and INR 1,500/t, respectively.

Rationale:

• PELLEX has been derived using data points, i.e., trades, offers, and bids. To download the detailed methodology Click here.
  
  
• No deal was reported so far this week and not taken into account for price calculation and accorded 0% weightage for T1 trade.
  
  
• Eleven (11) 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 1,000 /t w-o-w to INR 27,950/t exw on 20 October. Prices fell by INR 150/t d-o-d today. As per sources, steelmakers booked material from other regions at lower prices, which has forced sponge makers to reduce their offers.
  
  
• Billet prices fall sharply in Raipur: Billet prices in Raipur fell by INR 1,500/t w-o-w to INR 41,650/t exw on 20 October. Prices fell by INR 350/t d-o-d. The billet index fell significantly today, owing to weaker offerings in the semi-finished steel category, particularly in India's northern region market. Despite the price fall, buying activity for billet and sponge iron remained similar throughout the day.