SteelMint: PELLEX rises by INR 300/t as export deals support hike in offers

SteelMint's bi-weekly domestic pellet (Fe 63%) index, PELLEX, increased by INR 300/t to INR 10,100/t DAP Raipur on 15 December, 2023 compared to the last assessment on 12 December amid a hike in offers. One deal of 25,000 t of pellet (Fe63.5%) was reported at INR 10,450/t DAP Raipur in this publishing window. As per sources, a 40,000-t deal was also concluded at INR 12,300/t exw- Raipur for Fe66% recently.

Recently, the pellet plants hiked their raw pellet offers by up to INR 300/t supported by the export deals concluded in the last 10-15 days. The raw pellet prices also supported increased sponge and finished steel prices in the regions. As per sources, enhanced pellet offers in neighbouring regions also boosted Raipur pellet prices.

SteelMint's price assessment for sponge P-DRI (FeM 80%) in Raipur increased by INR 450/t w-o-w to INR 27,700/t exw on 15 December. Prices dropped by INR 150/t d-o-d. Due to lower buying activity, sponge makers dropped the offers.

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.
  
  
• Eleven (11) firm offers, bids, and indicative prices were heard. All were taken for price calculation and given the balance 50% weightage.
  
  

Market highlights:

• Pellet offers rise: GPIL raised pellet (Fe63.5% and Fe66%) offers by INR 300 ($4/t) to INR 10,300/t ($124/t) and INR 12,300/t ($148/t) exw-Raipur recently. Other pellet makers also increased their offers by INR 300/t ($4/t) to INR 9,900-10,000/t ($119-120/t) exw-Raipur.
  
  
• Raipur billet prices stable w-o-w: Billet prices in Raipur inched up w-o-w by INR 100/t to INR 40,400/t exw on 15 December. Prices witnessed a slight drop of INR 100/t on d-o-d basis. Considering the lower movement in the finished steel trade, buyers may have discovered offers on the upper side. Conversely, sellers are hoping that market activity will pick up, maybe as a result of the recent rise in raw material costs.
  
  

Outlook

Pellet prices may remain firm in the coming days amid the supportive sponge and steel markets. The pellet export deals may also push the offers northward in the coming days.