India: PELLEX rises by INR 200/t ($2.5/t) on increasing offers, NMDC price hike

• Pellet offers up INR 200/t ($2.5/t) in Raipur
  
  
• Sponge iron, billet prices rise sharply today
  
  
• NMDC iron ore offers rise up to INR 300/t ($4/t)
  
  

BigMint's bi-weekly domestic pellet (Fe 63%) index increased by INR 200/t to INR 10,050/t ($120/t) DAP Raipur on 30 April, 2024 compared to the last assessment on 26 April. After the sharp improvement in sponge iron and finished steel prices, buyers aggressively concluded deals this week. Around 45,000 t raw pellet (Fe 63/63.5%) deals were concluded in Raipur at INR 9,900-10,300/t ($119-123/t) DAP this week.

Pellet prices in Raipur increased after the iron ore price hike by NMDC Chhattisgarh last week. Firm sponge iron and billet prices enhanced market confidence.

GPIL has increased pellet offers for Fe63.5% by INR 200/t ($2/t) to INR 10,300/t ($124/t) exw-Raipur. Other producers, too, recently raised prices by INR 200/t ($2/t) to INR 9,900-10,000/t ($119-120/t) exw.

Sources said that previously buyers hesitated about booking as they were not sure about NMDC's price revision. However, after decent premiums in OMC's auction followed by hike in sponge iron and semi-finished steel prices, NMDC increased its raw material offers for the May deliveries.

NMDC increased list prices of iron ore fines and calibrated lump ore by INR 200/t and INR 300/t respectively, BigMint learned from sources. The company's prices are effective from 27 April, 2024. The miner has fixed prices of DR-CLO (10-40mm, Fe67%) at INR 7,270/t and iron ore fines (-10mm, Fe64%) at INR 5,260/t (on FOR basis from its Bacheli complex). Prices include royalty, DMF, and NMET charges.

A market participant said, "Pellet offers have been driven by NMDC iron ore prices and some improvement in the sponge iron and finished steel prices following positive market fundamentals. However, after this week's booking and some price pressure in Odisha, it will be interesting to see how the market direction will evolve."

Market snapshots

• Sponge P-DRI prices rise d-o-d: BigMint's P-DRI (FeM 80%) prices increased by INR 600/t ($8/t) w-o-w to INR 29,000/t ($348/t) exw on 30 April. On the other hand, prices dropped by INR 250/t ($3/t) compared to last week. India's sponge iron market witnessed a rise in prices today ranging from INR 250-750/t in all major locations. This increase in prices can be attributed to active spot trading coupled with active buying interest.
  
  
• Billet prices rise w-o-w: Billet prices in Raipur rose by INR 500/t ($6/t) w-o-w to INR 43,750/t ($514/t) exw on 30 April while prices sharply increased by INR 850/t ($10/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.
  
  
• Three (3) deals were reported so far in this publishing window and two(2) were taken into account for price calculation and accorded 50% weightage for T1 trade.
  
  
• Ten (10) firm offers, bids, and indicative prices were heard. Three (3) were taken for price calculation and given the balance 50% weightage.
  
  

Outlook:

Pellet prices in the Raipur region may remain supportive following increased iron ore prices and positive market fundamentals driven by sponge iron and finished steel.