Central India Pellet Buying Interest Slows Down; Limited Deals Reported

After witnessing a sharp hike in past few weeks, central India pellet offers remained unaltered this week. Major pellet makers in Raipur are heard giving offers in the range of INR 7,200-7,500/MT (ex-works, GST extra). However, market participants reported deals to have carried out in the price levels of INR 7,200/MT (ex-works, GST extra).

Central India based market sources shared that buying interest in pellets has slowed down as few sponge manufacturers are seen preferring NMDC lumps. Price of NMDC Baila lump (6-40 mm, Fe 65%) is currently around INR 3,100/MT (FoR price, Royalty, DMF, NMET other taxes extra). Its landed cost to Raipur based plant including crushing cost to 5-18 mm will be around INR 6,100/MT (GST extra).

Thus owing to price gap and higher prices in sponge iron, central India based sponge manufacturers are seen preferring NMDC lump. C-DRI prices in Raipur are currently trading at INR 22,300-500/MT (ex-Raipur) and P-DRI prices are hovering at INR 21,300-21,400/MT (ex-works).

Southern India participants reported good pellet demand

Southern India (Bellary) based pellet manufacturers have maintained offers stable this week amid good demand and firm P-DRI prices. Bellary pellet offers have moved up by around INR 500/MT against our last assessment. Current offers for Fe 63% grade pellets are heard around INR 7,500 (ex-Bellary).Trade sources also reported deals to have concluded at these levels by a major pellet manufacturer in southern India.

Trade-wise:

1. Durg (C.G) based pellet maker is offering pellets at INR 7,100/MT (ex-Durg).

2. A major pellet maker in Southern India concluded a deal of 12000-13000 MT at INR 7,500/MT (Ex-Bellary).

3. Pellet offers in Jamshedpur assessed around INR 6,600/MT (basic).

Indian Pellet Reference prices as on 16th Jan’18

*loaded to wagons
Prices (GST extra) mentioned for min 1000 MT qty booking on advance payment basis
Source: SteelMint Research