India’s domestic pellet prices across key markets rose by up to 12% m-o-m in December 2022 compared to prices in November, as per SteelMint’s assessment.
Pellet prices rebounded in the last month of the calendar year 2022 as a result of the removal of export duties on 18 November imposed by the government on 22 May.
The sharp rise in sponge iron prices propelled domestic pellets prices in December. Pellet-based sponge iron (PDRI) prices in Raipur increased by 4.3% m-o-m to INR 30,750/t exw.
Also, a surge in raw material (iron ore) prices pushed up pellet prices. The Odisha iron ore fines (Fe 62%) index shot up to INR 4,420/t ex-mines in December from INR 3,550/t in November.
SteelMint’s pellets index, PELLEX, rose by 12% m-o-m to INR 9,010/t DAP Raipur in December.
Trade volumes rise 18%
Pellet trade volumes in the domestic market rose by 18.1% m-o-m to 899,300 tonnes (t) in December compared to 761,350 t in the previous month.
Pellet demand in the domestic market also improved following the export duty revision which, in turn, supported prices. Buyers booked good volumes but kept themselves aloof from bulk buying.
Outlook
The domestic pellet market outlook is positive for January 2023. Prices are likely to remain on the higher side on the back of improved demand, high raw material prices and limited availability of high-grade iron ore in the market.
OMC raised floor prices for its iron ore auction on 17 January. The miner increased the floor price for fines by up to INR 1,250/t and for lumps by INR 3,650/t compared to the last auction on 16 December. This will extend support to pellet prices.
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