SteelMint

India: PELLEX remains stable, Raipur pellet offers unchanged

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by

Ratiram Gurjar
in
  • Raipur pellet offers remain unchanged
  • Slight improvement in P-DRI, billet prices

Pellet producers in the Raipur region have been inactive this week, following some closed sales and weak buyer response to current offers. Some Raipur-based sponge makers have purchased raw pellets from the Odisha region at competitive prices based on their needs.

BigMint’s bi-weekly domestic pellet (Fe63%) index remained stable at INR 9,000/t ($107/t) DAP Raipur as of 13 August, 2024, unchanged from the assessment on 9 August. During this period, deals for approximately 10,000 t of pellets was reported in Raipur at INR 8,550-8,800/t DAP Raipur from Odisha-based producers.

A steelmaker noted that local pellet prices are not viable for purchase compared to lower offers from neighbouring regions. Although sponge pellet and billet prices have slightly improved in recent days, pellet prices in Raipur remained relatively high. A price correction is anticipated in the coming days to facilitate more active deals in the region.

Another market participant highlighted a gap of around INR 300-500/t between current offers and workable prices in Raipur, as buyers remained uncertain about near-term downstream steel prices, despite a slight uptick in semi-finished and finished steel prices in the region.

Some Odisha-based plants have offered raw pellets (Fe62.5-63%) in Raipur at INR 8,400-8,800/t DAP Raipur, which may incentivise buyers to finalise deals from outside the region if local prices remained elevated.

Rationale:

  • PELLEX has been derived using data points, i.e., trades, offers, and bids. To download the detailed methodology Click here.
  • Two (2) deals have been reported so far in this publishing window and one (1) has been considered for price calculation and accorded a 50% weightage for T1 trade.
  • Twenty-three (23) firm offers, bids, and indicative prices were heard. Thirteen (13) were taken for price calculation and given the balance 50% weightage.

Factors driving PELLEX-

  • Pellet offers stable in Raipur: Raipur-based pellet producers have kept their offers stable for Fe 63% (+/-0.5) pellets at INR 9,100/t ($109/t) exw-Raipur. A few sellers were still not offering today.
  • Sponge iron prices stable w-o-w: P-DRI prices inched up by INR 50/t ($0.5/t) w-o-w to INR 24,500/t ($292/t) exw Raipur on 13 August. Meanwhile, d-o-d, prices rose by INR 150/t ($2/t) today. Moderate trades were recorded in Raipur in the second half of the trading day with improvement in offers.
  • Billet prices up by INR 250/t w-o-w: Billet prices in Raipur increased by INR 250/t ($3/t) w-o-w to INR 38,600/t ($460/t) exw today, while prices rose by INR 200/t ($2.5/t) d-o-d. The index rose today as sellers anticipated increased buying activity. However, buying in the semi-finished segment remained slow because demand for finished steel has not yet picked up enough to attract buyers.

Outlook

According to BigMint’s analysis, pellet prices in Raipur are expected to remain volatile due to fluctuations in steel prices and competitive offers from the Odisha region.

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