BigMint’s bi-weekly domestic pellet (Fe 63%) index fell by INR 200/t to INR 9,650/t DAP ($115/t) Raipur on 6 February 2024 compared to the last assessment on 2 February 2024. No deal was recorded in this publishing window in absence of active trade activities.
Pellet prices in Raipur fell following pressure from the sponge and finished steel markets. Buyers remained away from booking material and forced pellet makers to cut prices. As a result, producers lowered offers by INR 300/t yesterday.
However, even after the revision, no bulk deals were witnessed in the region amid the downtrend in the market.
A market participant commented, “The market sentiments are unpredictable as raw material prices increased but inversely sponge and finished steel market on downtrends. Few plants may cut the production in the coming days following present market dynamics.”
A few sources claimed that the market was facing liquidity issues amid poor margins in steel which hesitated the buyers to book fresh deals.
The conversion spread from sponge iron (PDRI) to billets for the standalone furnaces in the region was recorded at INR 13,000/t, slightly down w-o-w. It was lowered by INR 50/t compared to the last week.
NMDC had conducted over 100,000 t iron ore auctions from its Bacheli mines in Chhattisgarh on 31 January in which the entire quantity was booked by steelmakers in the auction. 16,800 t of DRCLO (10-40mm, Fe 67%), and 33,600 t of ROM (10-150mm, Fe 65.5%) were booked at INR 8,410 and INR 5,970/t while 50,400 t of fines (Fe 64%) were booked at INR 6,100/t. Prices include royalty, DMF, and NMET. Bids fetched were higher by INR 1,190/t in DR CLO and INR 790/t in fines.
Rationale
- PELLEX has been derived using data points, i.e., trades, offers, and bids. o download the detailed methodologyClick here.
- No deal has been reported so far this week, and not been taken into account for price calculation and accorded 0% weightage for T1 trade.
- Thirteen (13) firm offers, bids, and indicative prices were heard. Nine (9) were taken for price calculation and given the balance 100% weightage.
Market highlights
- Raipur pellet offers drop: Godawari Power and Ispat Ltd (GPIL) has reduced pellet (Fe 63% +/-0.5) offers by INR 300/t ($4/t) to INR 9,800/t ($118/t) exw-Raipur on 5 February, 2024. Another major pellet player in the region has reduced offers by INR 300/t ($4/t) to INR 9,400-9,500/t ($113-114/t) exw. Sluggish export prices and lower domestic buying interest weighed on pellet offers in the region.
- P-DRI prices in Raipur fall w-o-w: BigMint’s P-DRI (FeM 80%) prices fell by INR 150/t d-o-d to INR 26,100/t exw on 6 February. The assessment for the sponge in Raipur decreased by INR 550/t w-o-w today. Market participants remained cautious due to limited response from the finished steel market, BigMint noted. A significant steel price adjustment in the northern region also dragged prices lower.
- Billet prices in Raipur down w-o-w: Billet prices in Raipur dipped by INR 600/t w-o-w to INR 39,100/t exw on 6 February. Prices fell by INR 150/t d-o-d. The index dropped amid transactions recorded at lower prices and buyers were cautious, engaging only in need-based procurement.
Outlook
The pellet market in Raipur is expected to remain volatile in the coming days as buyers do not hurry to book material. Few buyers are waiting for more price reductions to conclude the deals in the coming days.