- NMDC rises iron ore prices by INR 50-100/t
- Need-based pellet purchases continue in Raipur
Pellet prices in the Raipur region remained firm during mid-week, supported by a sharp increase in sponge iron and semi-finished steel prices. However, buying activity in the market continues to be limited, as most buyers are placing orders only on a need-basis while closely monitoring market trends.
Trades and price movements
PELLEX, BigMint’s bi-weekly domestic pellet (Fe 63%) index for Raipur, remained stable at NR 10,800/tonne (t) ($117/t) DAP on 6 March compared to the previous assessment on 3 March. Raipur based pellet producers sold around 33,000 t pellet at INR 10,600-10,700/t exw.
Raipur-based pellet producers kept prices stable with a strong upward push from semi-finished prices led the Fe 62.5-63% (+/-0.5) grade pellet up to INR 10,600-10,700/t ($115-116/t) exw. No deals heard from Odisha based suppliers in the Raipur region.
NMDC announced its list prices of iron ore CLO (calibrated lump ore) and fines on 6 March, BigMint learnt from sources. The miner has fixed prices of DR CLO (10-40 mm, Fe 67%) at INR 5,350/tonne (t) ($59/t) and of iron ore fines (-10 mm, Fe 64%) at INR 4,050/t ($45/t). Prices are on FOR basis from the miner’s Bacheli complex and exclude royalty, DMF, and NMEDT. Prices of all grades were raised by INR 50-100/t. Prices excludes royalty, DMF, and NMEDT charges.
Market dynamics
Market participants stated that the recent surge in sponge iron and billet prices has played a key role in supporting pellet offers in the region. According to sponge iron producers, prices of sponge iron and billet have increased by around INR 2,000-2,500/t w-o-w, which has helped maintain the firmness in pellet prices despite subdued demand.
A sponge iron manufacturer based in Raipur commented, “The sharp rise in sponge iron and billet prices has improved sentiment in the market. This is indirectly supporting pellet prices, even though the buying activity for pellets is still limited.
However, several steelmakers indicated that procurement activity remains slow as they currently hold sufficient raw material inventory. Many buyers are adopting a cautious approach amid uncertain market dynamics.
A Raipur-based steelmaker said, “We have adequate inventory of raw materials purchased earlier, so there is no immediate urgency to procure pellets. The market is still uncertain, and we prefer to wait until price trends stabilize.”
Pellet sellers also confirmed that inquiries in the market remain slow, with most buyers refraining from making large purchases at present. Sellers are primarily waiting for bulk deals to be finalized in the coming days.
A market participant noted, “Inquiries are coming in, but they are mostly small volume requirements. We are waiting for bulk deals to conclude before the market sees stronger momentum.”
Meanwhile, raw material costs have also increased, providing additional support to pellet prices. NMDC recently announced a hike in iron ore prices for March deliveries, which may further influence pellet offers in the near term.
Rationale
- PELLEX has been derived using data points, i.e., trades, offers, and bids. To download the detailed methodology, click here.
- Two (2) deals was recorded in this publishing window, and was taken for calculation. Thus, the T1 trade category was accorded 50% weightage.
- Fourteen (14) firm offers, bids, and indicative prices were heard. Ten (10) were taken for price calculation and given balance 50% weightage.
Key market drivers
- Sponge iron prices hike w-o-w: Sponge PDRI prices rose by INR 2,150/t ($23/t) w-o-w on 6 March to INR 27,950/t ($303-304/t) exw-Raipur. Sponge iron prices in Raipur increased by INR 300/t d-o-d, supported by stronger buying momentum carried forward from the previous trading session in the spot market, which provided short-term cost support to billet producers.
- Billet prices spike w-o-w: BigMint’s billet index increased by INR 2,400/t ($26/t) w-o-w to INR 42,150/t ($458-460/t) exw-Raipur. Prices largely stable d-o-d today. Trading activity remained restricted throughout the session, with most procurement occurring strictly on a need-based basis. Buyers largely refrained from placing fresh bookings, preferring to wait for clearer price direction before committing to larger volumes. Mills also reported softer enquiry levels from downstream segments, which weighed on billet offtake.
Outlook
Pellet prices in Raipur are expected to remain firm in the short term, with larger transactions likely to be concluded next week once market sentiment stabilizes.
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