SteelMint: PELLEX rises by INR 200/t in recent deals, active export

SteelMint's bi-weekly domestic pellet (Fe 63%) index, PELLEX, increased by INR 200/t to INR 9,800/t DAP Raipur on 12 December, 2023 compared to the last assessment on 8 December. Total deals of 25,000 t of pellet were reported at INR 9,750-10,150/t DAP Raipur in this publishing window.

Few prominent local plants sold material in both local and overseas markets amid decent offers. Other plants also kept the raw pellet offers firm. Sources stated that central India-based plants offered material in the export market amid better margins comparatively. Few prominent plants from the local region sold around 110,000 t of cargo in the export market in the last 10 days.

On the other hand, in Raipur domestic market one of the significant pellet makers kept the sales closed and sources expected the offers may get revised in upcoming days.

SteelMint's price assessment for sponge P-DRI (FeM 80%) in Raipur sharply increased by INR 1,050/t w-o-w to INR 27,700/t exw on 12 December. Prices improved by INR 150/t d-o-d. Due to higher spot market offerings, buyers remained sidelined and cautious about booking material. Few steelmakers booked a small quantity at competitive offers from neighbouring regions.

Rationale:

• PELLEX has been derived using data points, i.e., trades, offers, and bids. To download the detailed methodology Click here.
  
  
• Two (2) deals were reported so far this week, one taken into account for price calculation and accorded 50% weightage for T1 trade.
  
  
• Nine (9) firm offers, bids, and indicative prices were heard. Six (6) were taken for price calculation and given the balance 50% weightage.
  
  

Market highlights:

• Pellet offers stable: GPIL kept pellet (Fe63.5% and Fe66%) offers stable at INR 10,000/t ($120/t) and INR 12,000/t ($144/t) exw-Raipur. Other pellet makers' offers also remained stable at INR 9,600-9,800/t ($115-116/t) exw-Raipur.
  
  
• Raipur billet prices up w-o-w: Billet prices in Raipur increased w-o-w by INR 900/t to INR 40,800/t exw on 8 December. Prices witnessed a stability on d-o-d basis. The billet index rose significantly today, owing to a market rebound and increased buying activity. The increase in finished steel sales throughout the day encouraged dealers to increase their offerings d-o-d. In addition to the billet index, demand for sponge iron remained stable as continued bookings supported additional increases in offers.
  
  

Outlook

Pellet prices are expected to remain supported in the near term amid the peak season of the steel industry in the winter as in previous years' trends. Active export deals at decent prices and improved domestic sponge market also may support the raw pellet prices in the region.