- Local pellet producer conclude active deals
- Sponge P-DRI, billet tags fall by INR 500-800/t w-o-w
The pellet market in Raipur remained largely rangebound this week, marked by moderate trading activity and cautious buying sentiment. While a few plants managed to sell pellet in bulk to both local and outstation buyers at prevailing price levels, the overall market mood remained subdued. This was primarily due to a sharp decline in sponge iron and billet prices, which fell by INR 450-800/ton, adding downward pressure on pellet demand.
Price movements
PELLEX, BigMint’s bi-weekly domestic pellet (Fe63%) index for Raipur, remained stable INR 9,250/t ($108/t) DAP Raipur on 3 June compared to the previous assessment on 30 May.
Raipur-based pellet makers kept their offers for Fe 62/63% (+/_0.5%) material at INR 9,100-9,200/t ($106-107/t) exw-Raipur on 3 June.
Pellet (Fe 62.5-63%) offers from Odisha for Raipur-based buyers were heard at INR 8,800-9,100/t ($103-105/t) DAP.
Trade activity
Raipur based pellet producers sold 120,000 t raw pellets at INR 9,000-9,100/t ($105-106/t) exw to local buyers. However, deals by Odisha supplier to Raipur buyers was absent.
Market sentiments
A local pellet supplier commented, “We are witnessing limited bulk buying as most buyers are only booking based on their immediate operational needs. There is no significant inventory buildup at the buyer’s end.”
Trade sources confirmed that no substantial pellet deals have been recorded between Odisha-based suppliers and Raipur buyers over the past few days. Market dynamics have been largely muted due to the slowdown in the downstream sector, with finished steel prices under pressure.
A Raipur-based steelmakers mentioned, ‘The fall in sponge and billet prices has created uncertainty. Buyers are hesitant to commit bulk volumes and are closely watching price trends before making any major decisions.”
Several buyers are reportedly waiting on the sidelines, seeking further clarity on price trends, especially with weak demand from secondary steel manufacturers affecting offtake. As a result, only pocketed trades were seen in the region, mostly aligned with plant operation requirements.
Market sources expect pellet prices to remain under pressure unless there is a recovery in sponge iron and billet prices or a pickup in end-user demand.
Rationale
- PELLEX has been derived using data points, i.e., trades, offers, and bids. To download the detailed methodology, click here.
- Four (4) deals were reported so far in this publishing window, and all were taken for calculations. The T1 trade category was accorded 50% weightage.
- Fifteen (15) firm offers, bids, and indicative prices were heard. Thirteen (13) were taken for price calculation and given a balance of 50% weightage.
*Barbil’s delivery term and grade have been updated from exw to LTW and 63% to 62.5%
Key market drivers:
Sponge iron tags drop d-o-d: P-DRI prices fell by INR 400/t (5/t) w-o-w to INR 23,500/t ($275/t) exw-Raipur on 3 June. Meanwhile, prices dropped by INR 100/t ($1/t) d-o-d. Following the downstream market sentiments and limited trading activity, sponge prices witnessed a drop today
Billet prices fall d-o-d: Billet prices in Raipur dropped by INR 600/t ($7/t) w-o-w to INR 38,900/t ($454/t) exw today. Prices saw a downtrend of INR 250/t ($3/t) d-o-d.
Outlook
As per BigMint’s analysis, the Raipur pellet market is expected to remain rangebound at current levels or either market see a drop in price amid the continuous weak downstream steel and sponge iron market.
Leave a Reply