India: Domestic Pellet Prices Reel Under Pressure Amid Dull Buying Interest

Domestic pellet prices in India reported mixed sentiments this week. While eastern and central India markets reported price corrections, southern and western India reported price increase.

Central India based market participant’s shared limited buying interest in pellets was seen from sponge manufacturers. Although pellet price assessment from major manufacturers is heard around INR 6,800/MT (ex-works, GST extra). Trade sources highlighted preference of iron ore over pellets by central India sponge manufacturers. Sources anticipate further fall in prices in near term.

P-DRI prices have increased marginally to INR 20,050/MT (ex-Raipur) against at INR 20,000/MT (ex-Raipur) a week ago.

Eastern India Pellet trades remain limited :

Pellet trades have remained subdued in eastern India and prices continue to remain under pressure..Reference pellet price assessment for Durgapur stands at INR 6,100-6,200/MT this week. P-DRI prices are hovering at INR 20,800/MT, up by around INR 200/MT on weekly basis.

Odisha’s Essel Mining has resumed sales from its Koira mines. This will ease out iron ore supply in the state which may, in turn, pull pellet prices downwards.

Southern India pellet prices increased marginally -:

Southern India (Ex-Bellary) based pellet manufacturers have increased pellet offers this week amid increasing P-DRI prices and good demand. Bellary pellet offers have moved up by around INR 100/MT against our last assessment. Current price assessment for Fe 63% grade pellets is heard around INR 7,200 (ex-Bellary).Trade sources also reported deals to have concluded at these levels.

Trade-wise-:

1. A major pellet maker in Southern India concluded a deal of 8,000-10,000 MT at INR 7,200/MT (ex-Bellary).

2. Rajasthan based pellet maker – Jindal SAW has raised offers to INR 7,200/MT (delivered Kandla). The pellet maker is offering material in limited quantities as it is undergoing maintenance shutdown and is likely to resume production in 1st week of Mar’18.

Indian Pellet Reference prices as on 20th Feb’18-:

*loaded to wagons
**delivered
Prices (GST extra) mentioned for min 1000 MT qty booking on advance payment basis
Source: SteelMint Research