- Decent deal concludes in Raipur
- Sponge and billet prices up by INR 2,700-3,200/t w-o-w
BigMint’s bi-weekly domestic pellet (Fe 63%) index increased by INR 450/t ($6/t) to INR 9,600/t DAP ($114/t) Raipur on 5 April 2024 compared to the last assessment on 2 April. Around 20,000 t pellet (Fe 63%) deals were recorded at the increased offer of INR 9,550/t ($115/t) DAP Raipur in this publishing window after prices were hiked by local pellet makers.
However, a few days back around 80,000 t deals were concluded by the Raipur pellet maker at around INR 9,050-9350/t DAP Raipur recently amid decent buying interest post price cut announcement.
However, pellet producers in the Raipur region hiked the pellet offers today by around INR 400-500/t amid the rise in sponge and finished steel prices in the last few days this week. As per the sources, pellet makers sold enough material post-reduction recently this week. One of the major pellet makers kept the offer closed today.
Godawari Power and Ispat Ltd (GPIL) has increased pellet offers for Fe 63.5% and Fe 66% (+/-0.5) by INR 500/t ($6/t) to INR 9,700/t ($117/t) and INR 11,000/t ($135/t) exw-Raipur, respectively. Other plants also raised prices by INR 400/t ($5/t) to INR 9,400/t ($113/t) recently.
A buyer from Raipur commented “The pellet makers increased the prices amid a sharp rise in the sponge and billet-rebar prices in the central-eastern region. The Odisha pellet makers also increased their offers recently and a few have good volume at both new and old offers in the local Odisha market.”
A market observer commented that the market saw a good uptrend post-Holi festival or last one week amid the imported scrap shortage. The billet mills shutdown amid power cuts followed by decent liquidity in the new financial year also supported the sponge market.
Other highlights:
- Sponge P-DRI prices jump w-o-w: BigMint’s P-DRI (FeM 80%) prices increased by INR 2,750/t ($35/t) w-o-w to INR 29,750/t ($361/t) exw on 5 April. Meanwhile, prices increased by INR 1,000/t ($13/t) d-o-d. The decent demand and influenced market sentiments from northern regions of India gave good support to sponge pellet offers in the central India market.
- Billet prices sharply rise w-o-w: Billet prices in Raipur significantly increased by INR 3,200/t ($14/t) w-o-w to INR 43,200/t ($481/t) exw on 5 April. Additionally, prices increased by INR 1,150/t ($6/t) d-o-d. The index has reached a new high, surpassing the rally of the last five months, driven by continuous buying support from the semi-finished and finished segments. Positive market sentiments have propelled the market to a new level, while participants appeared to be positive towards the response received in the finished steel segment, which has supported improved buying in sponge iron w-o-w.
Rationale
- PELLEX has been derived using data points, i.e., trades, offers, and bids. To download the detailed methodology Click here.
- One (1) deal was reported so far in this publishing window and taken into account for price calculation and accorded 50% weightage for T1 trade.
- Thirteen (13) firm offers, bids, and indicative prices were heard. Eleven (11) were taken for price calculation and given the balance 50% weightage.
Outlook
Pellet prices in the Raipur market may remain supported in the coming days. However, as per BigMint’s analysis, prices will depend on the sustainability of the sponge and finished steel sales at the increased prices.