- Pellet-makers keep offers unchanged
- OMC cuts base prices for upcoming auction
Pellet prices in Raipur remained largely stable, with a cautious undertone in the market amid weakness in sponge iron and billet segments. Sentiment across the downstream steel value chain stayed subdued, limiting aggressive buying interest.
Trades and price movements
PELLEX, BigMint’s bi-weekly domestic pellet (Fe 63%) index for Raipur, held stable at INR 11,000/t ($119/t) DAP on 17 Mar against the last assessment on 13 Mar. No major deals were recorded, reflecting cautious stance before any major or bulk volume transactions.
Offers for Fe 62.5-63% (+/-0.5%) grade pellets were heard at around INR 11,000/t ($119/t) exw, with producers maintaining firm price levels despite limited enquiries.
Market dynamics
Overall, trading activity remained subdued, with cautious participation from buyers and firm resistance from sellers keeping volumes limited. The market continues to operate in a wait-and-watch mode, with no strong directional cues emerging in the near term. Participants also noted that neighbouring markets are witnessing a similar slowdown, further reflecting the broader cautious sentiment.
A Raipur-based seller said, “We have kept our offers firm, but enquiries at higher levels are quite limited right now. We are not seeing the kind of demand that would justify any aggressive selling.”
A trader noted, “Buyers are still trying to understand where the market is heading, especially after the recent correction in sponge iron and billet prices. Until there is more clarity, they are avoiding bulk bookings.”
Buyers are indicating lower workable levels, while sellers remain firm, resulting in limited trade activity and a continued cautious tone in the market.
Buyers are closely tracking upcoming auctions by the Odisha Mining Corporation (OMC). The auction outcomes should give a clearer indication of raw material price direction. OMC will auction 3.6 mnt of iron ore (1.57-mnt lumps and 2.04-mnt fines) on 19 March. The miner reduced the base prices of lumps by INR 50-600/t, and fines by INR 250-650/t m-o-m.
Meanwhile, a sponge iron producer stated, “Pellets are still relatively expensive compared to iron ore lumps. Many of us are shifting to lumps for now as they offer better cost efficiency in sponge iron production.”
Rationale
- PELLEX has been derived using data points, i.e., trades, offers, and bids. To download the detailed methodology, click here.
- No (0) deals were recorded in this publishing window, and taken for calculation. Thus, the T1 trade category was accorded 0% weightage.
- Sixteen (16) firm offers, bids, and indicative prices were heard and thirteen (13) were taken for price calculation and given balance 100% weightage.
Key market drivers
- Sponge iron prices decline w-o-w: Sponge PDRI prices fell by INR 1,250/t w-o-w to INR 26,550/t exw Raipur, reflecting weak buying interest and cautious sentiment.
- Billet prices down w-o-w: Billet prices decreased by INR 450/t w-o-w to INR 41,750/t exw Raipur, with a d-o-d drop of INR 150/t, as earlier gains faded amid subdued downstream demand and a lull in buyer response. Only a few transactions were concluded at lower price levels, primarily driven by need-based procurement, while overall demand stayed weak.
Outlook
Pellet prices in Raipur are expected to remain under pressure. However, direction will depend on sponge iron, billet, and finished steel segments, and on bids in the upcoming OMC auctions on 19 March.
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