This week domestic pellet prices in eastern and central India have strengthened by INR upto INR 450/MT W-o-W following iron ore price hike. Pellet manufacturers in Durgapur have raised offers by INR 450/MT and that in Central India by INR 400/MT against offers made in the beginning of last week. Notably, more than 50% of India’s pellet capacity is concentrated in central and eastern regions of India.
Why are domestic pellet offers in India rising?
Less Iron ore rake availability-: Less rake availability in Odisha has hampered the iron ore movement in eastern parts of the country. Owing to this many sponge manufacturers have shifted to pellet usage over iron ore supporting domestic pellet price hike. Durgapur pellet offers increased from INR 6,100/MT to INR 6,500/MT W-o-W.
Hike in iron ore prices by Odisha merchant miners– Odisha based merchant miners has increased the iron ore prices last week, Lump prices have increased by INR 400/MT and fines by INR 200/MT. Following this, pellet manufacturers have also raised offers.
Increase in P-DRI prices – There is an increase in prices of pellet sponge in Eastern and central India. P-DRI (78 FeM) prices in Durgapur have increases INR 19,100/MT (del) against INR 18,300/MT a week ago. Similar price rise has been observed at Raipur. P-DRI (80 FeM) prices in Raipur have increased to INR 19,400-19,500/MT (ex-works) against INR 18,900/MT (ex-works) a week ago.
Indian Pellet Reference prices as on 19th Dec’17
| City | Grade (Fe %) | Basic Prices in INR/MT |
| Durgapur | 63 | 6,500 |
| Raipur | 63 | 6,500 |
| Jharsuguda | 63 | 6,200 |
| Jamshedpur | 63 | 6,000 |
| Bellary | 63 | 6,300-6,600 |
Prices (GST extra) mentioned are for min 1000 MT qty booking on advance payment basis
Source: SteelMint Research
Indian pellet export offers remain range bound – Pellet export offers from India remained firm this week and reference price is assessed around USD 114-115/MT, CFR China. No major export deals were reported this week as prices in domestic market were high. However Indian pellet manufacturers reported dull demand for Indian pellets from Chinese steel mills as they are still preferring making pellets out of imported concentrate. Currently imported concentrate (Fe 66%) price is assessed at USD 90/MT, CFR China.
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