India: PELLEX remains stable despite drop in sponge, finished steel prices

• Sharp drop seen in sponge, billet prices
  
  
• NMDC to auction 225,000 t of iron ore
  
  

BigMint's bi-weekly domestic pellet (Fe 63%) index remained stable at INR 9,850/t ($118/t) DAP Raipur on 26 April 2024 compared to the last assessment on 23 April. Buyers remained cautious about purchasing material amid fluctuating sponge and finished steel prices. No major deals were witnessed in the Raipur region in this publishing window.

Pellet prices in Raipur have remained stable despite the dynamic downstream steel market. Buyers are waiting for price changes from pellet producers.

Godawari Power and Ispat Ltd (GPIL) has kept offers for Fe 63.5% and Fe 66% (+/-0.5) stable at INR INR 10,100/t ($121/t) and INR 11,600/t ($139/t) exw-Raipur, respectively. Other producers' prices, too, remained stable at INR 9,800/t ($118/t) exw.

However, according to market sources, Raipur steelmakers did need-based booking of material from the Odisha region at INR 9,300-9,500/t DAP Raipur a couple of days ago as these prices were cheaper by INR 200-300/t against local offers. However, there were no confirmed deals emerging from Odisha at the time of publishing this article.

Most buyers remained on the sidelines, expecting price corrections by pellet producers as sponge and billet prices have continuously dropped this week. Buyers, in any case, were well-stocked, having booked enough material in the last few trading sessions.

The NMDC price revision for iron ore is yet to be declared for next month's delivery. Sources informed that the mining giant may revise prices next week for Chhattisgarh.

In its NMDC auction on 24 April, around 25,800 t of DR-CLO (10-40 mm, Fe 67%) were booked above the base price of INR 7,072/t, and 86,000 t of iron ore fines (Fe 64%) were booked at the base price of 5,098/t from Bacheli mines (including royalty, DMF & NMET).

NMDC will auction 17,200 t of iron ore DRCLO (10-40 mm, Fe 67%), 17,200 t of ROM (10-150 mm, Fe 65.5%), and 86,000 t of iron ore fines (Fe 64%) from Bacheli mines on 29 April. From Kirandul, around 103,200 t of ROM (10-150 mm, Fe 65.5%) will be actioned.

Market snapshots

• Sponge P-DRI prices fall w-o-w: BigMint's P-DRI (FeM 80%) prices decreased by INR 1,300/t ($17/t) w-o-w to INR 28,500/t ($342/t) exw on 26 April. On the other hand, prices dropped by INR 250/t ($3/t) d-o-d. Sponge prices fell amid the lower buying interest. However, few deals were concluded at dropped prices this week.
  
  
• Billet prices decline w-o-w: Billet prices in Raipur fell by INR 1,250/t ($16/t) w-o-w to INR 42,800/t ($514/t) exw on 23 April while prices decreased by INR 100/t ($1/t) d-o-d.
  
  

Rationale

• PELLEX has been derived using data points, i.e., trades, offers, and bids. To download the detailed methodology Click here.
  
  
• One (1) deals were reported so far in this publishing window but was not taken into account for price calculation due to low quantity and accorded 0% weightage for T1 trade.
  
  
• Nine (9) firm offers, bids, and indicative prices were heard. Five (5) were taken for price calculation and given the balance 100% weightage.
  
  

Outlook:

Pellet prices in the Raipur region may remain volatile amid the pressure from sponge and finished steel prices.