Pellet Prices in Eastern India Under Pressure Amid Limited Buying

Despite reduction in pellet prices no significant improvement has been noticed in sales.

Barbil pellet offers are in the range of INR 2,800-3,000/MT (loaded to wagons). Arya Iron & Steel pellet offers are at INR 2,900/MT (loaded to wagons). And Jindal Steel & Power is offering pellets at INR 3,000/MT (loaded to wagons). Few pellet makers are offering discount of INR 100-200/MT on bulk bookings.

“There is not much buying interest seen in pellet market and some pellet manufacturers are heard to reduce their offers to book sales. Despite this pellet movement is slow in the market”, quoted a market source.

Durgapur pellet offers are in the range of INR 3,700-4,000/MT (basic). Super Smelters is all set to come up with its pellet plant of 0.6 MnT pa capacity in West Bengal. The plant is likely to become operational within a month.

In other regions of India pellet prices continue to remain at similar levels as those seen in last week. However buying continues to remain weak.

Indian Pellet Prices as on 22 Feb’16

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

Trade-wise:

1. Shyam Metaliks & Energy (Jharsuguda) has sold around 4,000 MT pellets at INR 3,800/MT (basic)
2. A Raipur based pellet maker has sold pellets at INR 4,200/MT (basic)
3. Sources shared that an Odisha based pellet maker has sold pellets to Durgapur based plants at INR 2,500/MT (loaded to wagons) as per state differential pricing on high railway freight. However no official confirmation was received.
4. As per pellet rake movement tracked by SteelMint, till 21 Feb’16 28 pellet rakes were dispatched by major pellet makers in eastern India. The number of rakes dispatched are as follows: Jindal Steel & Power-15 rakes, Brahmani River Pellets-11 rakes and Arya Iron & Steel- 2 rakes