India: PELLEX increases marginally on active trading

1. Around 140,000 t of deals concluded in Raipur
   
   
2. Pellet offers rise by INR 600/t w-o-w
   
   
3. Sponge iron, billet prices rise sharply
   
   

BigMint's bi-weekly domestic pellet (Fe 63%) index increased by INR 50/t ($1/t) to INR 10,450/t ($124/t) DAP Raipur on 7 May, 2024 compared to the last assessment on 3 May. The index increased following the hike in pellet prices by Raipur-based producers. In the last 10 days Raipur pellet prices have been increased by around INR 700-800/t.

Active deals were witnessed this week as buyers booked aggressively. Around 21,000 t of deals were recorded at new offers of INR 10,750-11,050/t ($128-131/t) DAP Raipur. Prior to this, the sponge iron makers purchased around 75,000 t of pellets at INR 10,450-10,750/t recently at previous offers. A Durg-based producer sold around 45,000 t recently in the neighbouring region at INR 10,200/t exw.

Additionally, a few deals of 40,000 t were concluded from Odisha at INR 10,000-10,200/t DAP Raipur recently this week.

"The rise in pellet prices in Raipur can be attributed to heightened market activity in the region, coupled with the uptrend in sponge and steel prices. Additionally, reports suggest that the expansion of sponge iron capacity in the region has heightened demand for raw materials, while limitations in iron ore supply from miners have contributed to constraints in the market."

Godawari Power & Ispat (GPIL) has increased pellet offers for Fe63.5% and Fe 66% by INR 300/t ($4/t) to INR 10,900/t ($130/t) and INR 12,400/t ($148/t) exw-Raipur respectively on 6 May. Other producers have raised prices by INR 200-300/t ($2-4/t) to INR 10,500-10,600/t ($126-127/t) exw on high demand.

A buyer said: " The sharp rise in the sponge and finished steel prices boosted market confidence which supported pellet offers in Raipur. Almost around 150,000 t of deals were witnessed in this publishing window".

• Sponge P-DRI prices rise w-o-w: BigMint's P-DRI (FeM 80%) prices increased by INR 1,250/t ($15/t) w-o-w to INR 30,250/t ($368/t) exw on 7 May. On the other hand, prices are downward by INR 100/t ($1/t) compared to the last week. Limited trading activity was reported, as buyers had already placed enough orders yesterday. So, they came forward for only need-based bookings. However, prices increased in the last weekend with the supporting trading activities.
  
  
• Billet prices rise around INR 1,500/t w-o-w: Billet prices in Raipur rose by INR 1,500/t ($18/t) w-o-w to INR 45,250/t ($553/t) exw on 7 May while prices sharply decreased by INR 300/t ($4/t) d-o-d.
  
  

NMDC Chhatisgarh has scheduled an auction for over 260,000 t iron ore.Around 10,000 t lumps (10-20 mm, Fe 65.5%) from Kumhar Marenga siding on 9 May, while 60,200 t ROM (10-150 mm, Fe 65.5%) on 10 May'24 from its kirandul mines. The miners will auction 43,000 t DRCLO (10-40 mm, Fe 67%), 8,600 t ROM (10-150 mm, Fe 65.5%) and 133,300 t fines (Fe 64%) on 10 May'24 from the Bacheli mine. Also, 6,000 t Baila lumps (10-20 mm, Fe 65.5%) on 14 May'24.

Rationale

• PELLEX has been derived using data points, i.e., trades, offers, and bids. To download the detailed methodology Click here.
  
  
• Ten (10) deal was reported so far in this publishing window and five (5) were taken into account for price calculation and accorded 50% weightage for T1 trade.
  
  
• Twelve (12) firm offers, bids, and indicative prices were heard. Six (6) were taken for price calculation and given the balance 50% weightage
  
  

Outlook:

Pellet prices in Raipur may remain supportive following positive market sentiments and active buying interest.