Increasing Imported Lump Price May Boost South India Pellet Demand

Amid festive holidays, Indian pellet market has remained dull this week. Not much revision in pellet prices has been done by pellet makers this week. However in South India increase in imported lump price will favor domestic pellet demand.

Week 13 Highlights:

1. Barbil pellet offers are seen at INR 3,100-3,200 (loaded to wagons). Arya iron & Steel is offering pellets at INR 3,200/MT (loaded to wagons) and Jindal Steel & Power pellet prices are at INR 3,100/MT (loaded to wagons)
2. A Jharsuguda based pellet maker has recently concluded a pellet deal at INR 3,800/MT (basic)
3. Raipur pellet offers remain unchanged at INR 4,300/MT (basic) for Fe 63% pellets
4. Southern India based pellet makers shared that sharp decline in pellet sponge prices has been seen this week. P-DRI prices in Bellary have fallen by INR 950/MT W-o-W. Pellet prices in Bellary for Fe 63% pellets are in the range of INR 4,600-4,800/MT (basic)
5. Jindal SAW pellet offers have fallen by INR 100/MT W-o-W. Current offers for Fe 63% pellets are at INR 5,250/MT (delivered Kandla, CST extra)

Week 14 Prospects:

1. A southern India based pellet maker shared that offers for imported lump to India have moved up over rise in global iron ore prices. This has reduced the interest of importers as a result of which domestic pellet market in Bellary may witness buying interest in the coming days
2. Currently offers for imported South African lump are at USD 71/MT, CFR Kandla for Apr’16 bookings
3. Industry sources shared that few pellet makers in eastern India may resume merchant sales in April which had shut their plants months back over unviability

Indian Pellet Prices as on 23 Mar’16

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

Note: Bellary pellet makers are seen offering Fe 63 grade pellets instead of Fe 62.