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India: PELLEX remains largely stable amid festivity

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Pellets

BigMint Bureau

366 Reads

17 Sep 2024, 21:02 IST

India: PELLEX remains largely stable amid festivity

Pellet trades remain slow in Raipur

P-DRI prices largely up, billet prices stable

Pellet prices in Raipur remain unchanged

Local pellet offers have remained unchanged due to a lack of trading activity from buyers. Because, major buyers have stayed away from the market because of the festive season in the Raipur region. A few pellet producers from Odisha have been negotiating with Raipur steelmakers, but no deals have been finalised yet.

BigMint's bi-weekly domestic pellet (Fe63%) index down by INR 50/t to INR 8,600/tonne ($102/t) DAP Raipur as of 17 September, 2024. Raipur-based traders secured approximately 40,000 t of pellets (Fe62.5%) from Odisha at INR 8,100-8,300/t ($97-100/t) DAP.

According to sources, trade activity was slow in the new week due to reduced interest from steelmakers in Raipur. Pellet buyers were cautious about new transactions, awaiting the OMC iron ore auction scheduled for 20 September. Major plants have sufficient raw material inventory for the coming weeks, which is why they have avoided purchasing at current prices.

Sponge iron prices remained largely stable, while finished steel prices declined. Buyers aimed to acquire material at prices INR 300-400/t lower than the offers made by local producers, but no deals were finalised.

"During the festival, market activities slowed down. The decrease in finished steel prices and fluctuating sponge prices deterred buyers from participating in the market. Sellers from Odisha continued to offer their products to buyers in Raipur this week, but no significant transactions were recorded," a market participant stated.

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 in the publishing window and two were considered for price calculation. This was accorded a 50% weightage as T1 trade.

Fourteen (14) firm offers, bids, and indicative prices as T2 were heard. Thirteen (13) were taken for price calculation and given the balance 50% weightage.

Factors influencing PELLEX

Pellet offers remain stable: Raipur-based pellet makers kept their offers for Fe 63% (+/- 0.5%) stable at INR 8,600/t ($102/t) exw-Raipur as of 17 September. A seller concluded transactions at these prices recently.

Sponge iron prices up: P-DRI prices increased by INR 300/t w-o-w to INR 25,000/t ($298/t) exw-Raipur on 17 September. In fact, prices increased by INR 100/t d-o-d today.

Billet prices largely stable w-o-w: Billet prices in Raipur inched up by INR 50/t w-o-w to INR 37,400/t ($444/t) exw. However, on a d-o-d basis, billet prices increased by INR 100/t ($1-1.5/t).

Outlook

According to BigMint's analysis, pellet prices in the Raipur region may remain volatile in the coming days. The upcoming OMC iron ore auction is expected to play a key role in determining the market dynamics.