Pellet Prices Under Pressure on Falling Iron Ore Prices

Recently, some Odisha miners have cut lump prices upto INR 400/MT while, on the other hand fines prices have witnessed reduction upto INR 200/MT. Many sponge iron manufacturers have been heard to be shifting to lump from pellets over cheaper availability of the former.

Majority of pellet manufacturers in eastern India have kept their prices unchanged as of now. At Barbil, JSPL is offering Fe 63% pellets at INR 4,750/MT (loaded to wagons) and Arya Iron & Steel is offering pellets at INR 4,600/MT (loaded to wagons).

However, in Jharsuguda pellet prices have fallen by INR 200/MT W-o-W to INR 4,800/MT (basic) over weaker sales. Cheaper lump (5-18 mm is currently at INR 3,000-3,250/MT, ex-mines & inclusive of royalty) availability has made some sponge makers to shift towards it.

In central India, pellet prices continue to remain stable; however, buyers looked resistant making bulk bookings. Current offers for Fe 63% pellets are hovering in the range of INR 5,200-5,400/MT (basic).

In south India, looking at significant decline (INR 600/MT W-o-W) in P-DRI prices, pellet makers have also reduced their offers. Current offers for Fe 63% pellets are in the range of INR 4,650-4,900/MT (basic).

Jindal Saw pellet offers continue to remain stable at INR 5,350/MT (basic delivered Kandla).

Trade-wise:

1. Essar Steel exported 20,000 MT pellets to Malaysia via Paradip Port on 28 Aug’15
2. Last week, Jayaswal Neco sold pellets at INR 5,400-5,500/MT (basic & VAT exempted). Current offers are at INR 5,500/MT (basic & VAT exempted)
3. Tata Steel bought 3 pellet rakes last week. 2 from JSPL and 1 from OMML, Adhunik.
4. Sources say JSPL has sold approx 1 lakh MT pellets to Tata Steel for Sept’15 delivery which has eased JSPL from not selling pellets at a discounted price

Indian Pellet Prices as on 07 Sept’15

Basic prices in INR/MT
*loaded to wagons
**delivered 
Source: SteelMint