Indian domestic pellets (Fe 63% grade) prices across major markets decreased sharply by up to INR 4,100/tonne (t) m-o-m in Nov’21, as per SteelMint’s assessment.
The sharp fall in prices was due to limited trade and bearish sentiments. Even, a slight uptick in sponge prices seen in the later part of the month seem to have no impact on pellet prices.
SteelMint’s bi-weekly pellet index, PELLEX, was recorded at INR 9,750/t DAP Raipur on 30 Nov’21, falling by INR 3,450/t m-o-m against INR 13,100/t on 29 Oct’21.
Prices in various regions:
Raipur: Pellet prices in Raipur were registered in the range of INR 10,500-10,800/t exw basis in end-Nov’21. Prices dropped by up to INR 1,200/t compared to the prices seen in the ealy-Nov’21.
Bellary: Pellet offers in Bellary, Karnataka, were assessed at around INR 10,500/t in end-November. Prices fell by INR 1,600 compared to last month’s prices.
Barbil: Offers of Fe 63% pellets in Barbil, Odisha were recorded at INR 9,000-9,400/t exw in end-Nov’21. Prices fell by around INR 3,500-4,100/t on a m-o-m basis.
Jharsuguda: Prices in Jharsuguda, Odisha were recorded at INR 9,300-9,500/t exw in end-Nov’21, down by INR 2,400-2,600/t m-o-m.
Jamshedpur: Prices in the major pellets trading region, Jamshedpur, Jharkhand fell by up to INR 2,700/t m-o-m to INR 9,000-9,500/t exw at the month-end.
Kandla: Pellet (Fe 63/64% grade) prices in Gujarat’s Kandla were assessed at INR 10,750/t DAP basis in end-Nov’21. Prices decreased sharply by INR 2,750 m-o-m.
Trade and deals of key markets
As per SteelMint’s assessment, a total of around 305,000 t of pellet deals were concluded on exw basis in the key markets, a decrease of 30.8% m-o-m as against 441,500 t of deals recorded in Oct’21.
Market highlights –
Exports market silent
Indian pellet export market continues to remain muted on lacklustre trading since last few months. Producers kept away from making export bookings due to lower realisation as China, the major buyer, remained absent amidst steel production controls there.
Domestic supply improves
SteelMint had reported that the Odisha high court granted one-month time (starting from 15 Nov’21) to the ex-lessees of the iron ore mines to move their material. This resulted in excessive supply in the domestic market which, in turn, kept pellet prices under pressure.
Meanwhile, demand continues to remain weak with buyers adopting a ‘wait and watch’ mode.
NMDC lump prices hit 8-month low
PSU miner NMDC cut iron ore prices sharply for Dec’21 deliveries.
Lumps prices saw a sharper correction compared to fines. After the price cut, the miner’s lump offers hit an eight-month low, data maintained with SteelMint shows.
Falling sponge prices lower pellet prices
Domestic sponge iron prices fell throughout the month due to sluggish finished steel sales. However, in the late-Nov’21, sponge prices revered slightly. The volatility in sponge iron prices limited pellet bookings.
SteelMint’s assessment for sponge iron, P-DRI (FeM 80%), dropped sharply by INR 1,100/t to INR 28,900/t exw-Raipur on 30 Nov’21 as against INR 33,000/t seen on 30 Oct’21.
Outlook
In early-Dec’21, domestic sponge iron prices saw a slight uptick. However, this rebound is less likely to support domestic pellet prices due to persistent weak demand, sluggish trade and falling iron ore prices. The market is volatile at present and hence, most market participants are uncertain about the near-term trend. However, recovery in global iron ore prices may lend support to Indian pellet export prices.
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