Odisha Lump Pressurizes Central Indian Pellet Prices, Fall by INR 150/MT

Pellet prices in Raipur are facing pressure from Odisha lump. Following this, pellet (Fe 63%) prices in Raipur have declined by INR 150/MT W-o-W and are currently hovering in the range of INR 4,100-4,200/MT (basic). However as per market participants, buyers are looking for levels of INR 4,000-4,100/MT (basic).

A central India based market participant highlighted that “Majority of sponge iron manufacturers are seen favouring Odisha lump over Raipur pellets. The reasons being higher margins in C-DRI compared to P-DRI (C-DRI costlier by INR 1,300/MT) and cost effectiveness in lump versus pellets”.

*prices as per loaded to wagons, inclusive of Royalty, DMF & NMET
Source: SteelMint Research

On one side where landed cost of Odisha lump is coming around INR 4,200/MT. On the other hand, landed cost of Raipur pellet (Fe 63%) will stand at INR 4,200-4,250/MT (inclusive of transport to plant). Premium in sponge C-DRI to P-DRI stand at INR 1,300-1,500/MT. Thus there being considerable difference between the two, Odisha and NMDC lump is more preferred.

Week 18 highlights:

1. Eastern India pellet offers remained majorly unchanged amid dull buying. However some decline was seen in Jharsuguda (fall by INR 100/MT) and Jamshedpur pellet prices (decline by INR 50/MT)
2. Durgapur pellet offers remain unmoved at INR 3,400-3,800/MT (basic)
3. Southern India pellet offers remain more or less stable and are in the range of INR 4,280-4,500/MT (basic) for Fe 63% pellets. However sources shared that pellet demand has improved over last week with imported lump offers becoming costlier

Indian Pellet Prices as on 26 Apr’16

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