Declining Sponge Prices Put Indian Pellet Offers Under Pressure

Declining pellet sponge prices, have put Indian pellet prices under pressure and pellet prices have fallen by INR 100-300/MT W-o-W.

Falling sponge prices have started experiencing pressure on domestic pellet offers. In week 43, pellet prices in central India have declined by INR 100-300/MT and in Jharsuguda they have fallen by INR 300/MT.

Market participants shared that sponge prices have registered considerable fall post holidays amid lesser sales in finished steel goods which has resulted in limited trades. P-DRI prices in eastern India have fallen upto INR 1,000/MT W-o-W. Following this, domestic pellet prices are also likely to experience decline.

Talking about eastern India, most of pellet manufacturers continue to hold offers except Jharsuguda where prices have fallen by INR 300/MT W-o-W. Arya Iron & Steel continues to hold its offers at INR 3,850/MT (loaded to wagons).

Raipur pellet offers may fall further by INR 200-300/MT – Amid weak buying interest from sponge manufacturers, Raipur pellet makers have reduced offers to INR 4,800-4,900/MT (basic). However, market sources shared that there is limited buying interest at present offers and it is anticipated that they may further lower offers by INR 200-300/MT.

Pellet buying in south India remains weak – Southern India based pellet makers shared that with sharp price cut of INR 1,300/MT W-o-W in pellet sponge, pellet buying interest has also remained weak. However they are maintaining same offers as of now and in Bellary offers for Fe 63% pellets are at INR 5,100-5,200/MT (basic). Offers are likely to come down in the near term.

Trade-wise :

1. Southern India based pellet maker – MSPL reduced Fe 65% pellet offers by INR 100/MT. Present offers are at INR 5,600/MT (basic).

2. Bilaspur based pellet maker – Rashi Steel & Power is offering pellets at INR 4,600/MT (ex-Bilaspur). Offers have come down by INR 300/MT W-o-W.

3. West Bengal based Super Smelter’s pellet offers remain unchanged at INR 4,800/MT.

4. Keonjhar based Ardent Steels has resumed pellet production and as per market sources the pellet maker is looking up for exporting pellets for which it has started railway movement to Dhamra port.

Indian Pellet Prices as on 18 Oct’16

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