India: PELLEX increases by INR 350/t ($4/t) following hike in pellet offers

• Sponge iron, billet prices rise sharply w-o-w
  
  
• NMDC sells over 120,000 t iron ore in recent auction
  
  

BigMint's bi-weekly domestic pellet (Fe 63%) index increased by INR 350/t ($4/t) to INR 10,400/t ($124/t) DAP Raipur on 3 May, 2024 compared to the last assessment on 30 April. The pellet index increased following the northward pellet price revision by Raipur pellet makers.

However, no deals were reported at new offers. Meanwhile, around 8,000 t of raw pellet (Fe 63%) deals were concluded in Raipur at INR 10,150/t ($122/t) DAP Raipur before offers rose later today.

Pellet prices in Raipur increased after the sharp hike in the sponge-PDRI and other steel commodities in the central region this week. However, buyers remained sidelined to conclude deals at the new offers. They have already booked sufficient material and were not in a hurry to book material at the increased offer.

Although offers at the nearby Raipur location have become more attractive following a price increase, pellet producers in other locations have kept their offers largely stable.

GPIL has increased offers for Fe63.5% and Fe66% pellets by INR 300/t ($4/t) to INR 10,600/t ($127/t) and INR 12,100/t ($145/t) exw-Raipur respectively today. Other producers, too, raised their prices by INR 300/t ($4/t) to INR 10,300/t ($123/t) exw on rising sponge prices in the region.

A buyer said: "We have already purchased sufficient material at previous prices. Currently, we are waiting for the next market step as it will be interesting to observe steel prices' dynamics in the next few days. On the other hand, the landed pellet offers in Raipur from neighbouring regions were approximately INR 500/t ($6/t) cheaper than the local prices. However, steelmakers chose to remain in a wait-and-watch mode and didn't make any purchases."

• Sponge P-DRI prices rise w-o-w: BigMint's P-DRI (FeM 80%) prices increased by INR 1,000/t ($12/t) w-o-w to INR 29,500/t ($353/t) exw on 3 May. On the other hand, prices are upward by INR 250/t ($3/t) compared to the last week. This rise in prices reflects increased buying activity in response to higher offers.
  
  
• Billet prices rise around INR 2,000/t w-o-w: Billet prices in Raipur rose by INR 1,750/t ($21/t) w-o-w to INR 44,650/t ($535/t) exw on 3 May while prices sharply increased by INR 550/t ($7/t) d-o-d.
  
  

NMDC auctioned over 223,000 t of iron ore from Chhattisgarh on 2 May 2024. From Bacheli mines, around 17,200 t of DR-CLO (10-40 mm, Fe 67%) was booked at a premium of 1%, 17,200 t of ROM (10-150 mm, Fe 65.5%) was booked at the base price and 86,000 t of fines (Fe 64%) at a premium of 0.2%. However, 103,200 t of ROM (10-150 mm, Fe 65.5%) remained unsold from Kirandul.

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 in this publishing window but not taken into account for price calculation and accorded 0% weightage for T1 trade.
  
  
• Fifteen (15) firm offers, bids, and indicative prices were heard. Seven (7) were taken for price calculation and given the balance 100% weightage.
  
  

Outlook:

Pellet prices in the Raipur region may remain supportive following positive market sentiments in steel commodities.