Steel Mint’s Raipur pellet index, PELLEX, saw trade volumes falling by 17%, m-o-m, to 96,500 t in Nov’21 compared to over 117,000 t in Oct. Compared to more than 160,000 t of deals recorded in Sept, total trading monitored by the index in Nov shows a drop of around 40%, as per month-wise data compiled by SteelMint.
Trading remained subdued on account of low buying interest from sponge iron producers in the midst of a correction in steel prices. Even a sharp reduction in offers could not boost buying interest. Data shows that offers by central India-based pellet producers dropped by around 25% in the period between 6 Nov and 30 Nov.
Downtrend in prices
Meanwhile, pellet-based sponge iron prices in Raipur slipped by 9-10% on the month, or by INR 3,000-3,500/t, compared to the beginning of Nov. Likewise, SteelMint’s iron ore lump (5-18 mm, Fe 63%) prices decreased by nearly 15% to INR 9,000/t exw-Odisha on 4 Dec from INR 10,550/t a month ago.
Towards end-Nov, PSU miner NMDC reduced iron ore prices by up to INR 870/t for Dec despatches, with lump ore prices being reduced to the lowest level in over eight months, as per SteelMint data. Miners in Odisha, too, cut prices. Domestic prices came under pressure with iron ore imports increasing due to the sharp downtrend in global prices.
Weakening raw material prices and soft downstream demand weighed on the index. SteelMint estimates the weighted average price of pellet (Fe 63%) in Raipur at INR 11,500/t in Nov as against INR 13,350/t in Oct – a drop of close to 14%.
However, PELLEX has rebounded by around INR 450/t to INR 9,950/t in Dec as optimism prevails in the market over renewal of enquiries both in the domestic and export markets.
PELLEX
Pellex monitors the dynamics of India’s largest merchant pellet market – Raipur. Along with recording sales and offers from Raipur-based producers, the index also tracks deals concluded by pellet producers based in other major markets of the country – Odisha, Karnataka and western India – for sponge iron manufacturers in Raipur. It is a mathematically precise index aiming to provide accurate price assessment for traders.
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