This week domestic pellet prices in eastern and central India have strengthened by INR 100-400/MT W-o-W. Pellet manufacturers in Durgapur have raised offers by INR 400/MT W-o-W and that in central India by INR 300/MT W-o-W. Notably, more than 50% of India’s pellet capacity is concentrated in central and eastern regions of India.
Why are domestic pellet offers rising ?
1. Hike in P-DRI prices – There is a marked increase in prices of sponge in Eastern and central India. The P-DRI prices in Durgapur stood at INR 16,900/MT as on 21st Nov’17 and rose to INR 17,700/MT (delivered) on 28 Nov’17. Similar price rise has been observed at Raigarh and Raipur. Thus on weekly premises, pellet offers have increased by INR 700/MT supporting pellet price hike.
2. Preference by sponge makers over iron ore – EC renewal of Serajuddin mines is pending and is to expire on 2nd Dec’17, which may result in interim reduction in iron ore supplies from the mines. It is expected that the renewal may take about 15-20 days, reducing iron ore supplies and will further support pellet price rise.
Rake availability for iron ore has been hampering movement in eastern parts of the country since past couple of months leading to cancellation of indents and delayed deliveries to plants. East India based sponge makers are seen preferring pellets over iron ore owing to prompt delivery than that of iron ore.
Indian Pellet Reference Prices as on 28 Nov’17
|
City |
Grade (Fe %) |
Basic Prices in INR/MT |
| Barbil* | 63 | 5,150 |
| Durgapur | 63 | 5,800-5,900 |
| Raipur | 63 | 5,800 |
| Jharsuguda | 63 | No offers. Last deal concluded at INR 5,600/MT |
| Jamshedpur | 63 | 5,400 |
| Bellary | 63 | 6,200-6,400 |
Prices (GST extra) mentioned are for min 1000 MT qty booking on advance payment basis
Source: SteelMint Research
*Loaded to Wagon
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