BigMint’s bi-weekly domestic pellet (Fe 63%) index rose by INR 100/tonnes (t) ($1/t) to INR 10,450/t ($125/t) DAP Raipur on 14 May,2024 compared to the last assessment on 10 May. Raipur sponge and steelmakers booked around 15,000 t of pellets (Fe 63%) at INR 10,650-10,700/t DAP Raipur in this publishing window.
In another deal, around, 6,000 t of pellets were booked at INR 10,500/t DAP Bilaspur. It was noted that buyers booked decent material last week from outside of Raipur and Odisha at competitive prices. However, material delivery is a concern among buyers from other locations.
In Raipur, one of the major pellet makers put its plant under maintenance shutdown for another 2-3 days, raising supply constraint issues, as per sources.
Godawari hiked pellet offers by INR 300/t for Fe63.5% and Fe66% to INR 11,200/t ($134/t) and INR 12,700/t ($152/t) exw-Raipur respectively on 14 May. Other pellet producers kept offers stable at INR 10,500-10,600/t ($126-127/t) exw.
A buyer stated that they booked in bulk quantities last week even though NMDC’s rake movement is still interrupted. However, the ongoing NMDC strike has been partially resolved, and materials from its Kirandul mines have started moving by road. Market participants are in wait-and-watch mode. Sponge and finished steel prices also dropped in Raipur.
A trader said: “Raipur pellet buyers were cautious, as they are expecting the market to remain volatile in the near term. Meanwhile, they are also waiting for the upcoming OMC auction for price clarity. However, some pellet producers are receiving competitive prices from nearby regions that are lower by INR 500-600/t compared to the prevailing offers in Raipur.”
- Sponge P-DRI prices largely stable d-o-d: BigMint’s P-DRI (FeM 80%) prices increased by INR 50/t ($1/t) d-o-d to INR 29,250/t ($350/t) exw on 14 May. However, prices declined by INR 1,000/t w-o-w. Indian sponge iron prices dropped by INR 100-450/t today in major locations. There was a rise in trading activities on improved demand at lower prices, especially in the central region (Raipur and Raigarh). This region recorded over 20,000 t of transactions which comprised 50% of the total trade volumes today, followed by the eastern region.
- Billet prices rise y INR 200/t d-o-d: Billet prices in Raipur increased today by INR 200/t ($5/t) d-o-d to INR 44,350/t ($533/t) exw but dropped by INR 900/t w-o-w. The billet index witnessed an increase today, buoyed by positive demand dynamics in both the semi-finished and finished steel markets. Improved transaction volumes in sponge iron and finished steel helped support overall buying activity, indicating strengthening market sentiments through the day.
Rationale
- PELLEX has been derived using data points, i.e., trades, offers, and bids. To download the detailed methodology Click here.
- Two (2) deals were reported so far in this publishing window and only one (1) was taken into account for price calculation and accorded 50% weightage for T1 trade.
- Ten (10) firm offers, bids, and indicative prices were heard. Eight (8) were taken for price calculation and given the balance 50% weightage.
Outlook:
Pellet prices in Raipur are expected to remain volatile amid offer-bid disparities. However, buyers already book enough material last week. The market is also awaiting OMC’s iron ore e-auction for better price clarity on iron ore.