SteelMint: PELLEX rises by INR 100/t in recent deals at increased offers

SteelMint's bi-weekly domestic pellet (Fe 63%) index, PELLEX, increased by INR 100/t to INR 10,200/t DAP Raipur on 22 December, 2023 compared to the last assessment on 19 December amid a hike in offers. Total deals of 15,000 t of pellets (Fe63%) were reported at INR 10,150-10,350/t DAP Raipur in this publishing window.

The raw pellet offers in the Raipur region increased as the bids in the OMC auction increased for iron ore fines. However, continuous raw pellet and iron ore fines export from the central-eastern region supported the domestic offers. Plants are dispatching the material of advance bookings in the previous order. However, sponge makers stated that current offers are not viable as sponge iron and finished steel prices decreased by up to INR 1,000/t in the last one week while raw pellet increased by INR 400-500/t in the same period.

On the other hand, a pellet maker increased the offers by INR 200-300/t yesterday owing to dispatch pressure amid export bookings. As per the sources, few sellers have less stock at the moment for any new bookings.

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, taken into account for price calculation and accorded 50% weightage for T1 trade.
  
  
• Eight (8) firm offers, bids, and indicative prices were heard. Seven (7) were taken for price calculation and given the balance 50% weightage.
  
  

Market highlights:

• Pellet offers rise: Pellet makers in Raipur increased offers by INR 200-300/t to INR 10,200/t ($122/t) exw-Raipur. However, GPIL pellet (Fe 63.5% and Fe 66%) offers remained stable at INR 10,300/t ($124/t) and INR 12,300/t ($148/t) exw-Raipur recently
  
  
• Raipur P-DRI prices down w-o-w: SteelMint's price assessment for sponge P-DRI (FeM 80%) in Raipur decreased by INR 1000/t w-o-w to INR 26,700/t exw on 22 December. Prices dropped by INR 150/t d-o-d. Overall, sponge pellet prices decreased but buying activities improved after prices were influenced by the North Indian market. However, some participants booked material amid the holidays of Christmas as liquidity may be affected during the holidays.
  
  
• Raipur billet prices fall w-o-w: Billet prices in Raipur inched down w-o-w by INR 950/t to INR 39,800/t exw on 19 December. Prices witnessed stability on a d-o-d basis. Mixed sentiments in the spot market caused a minor uptick in buying activity d-o-d, which in turn caused a slight increase in material bookings.
  
  

Outlook

Pellet prices may remain firm in the coming days amid active export offers and increased raw material offers in Odisha regions. However, the volatility of the sponge and finished steel markets may affect the raw pellet offers in the regions.