India: PELLEX remains stable amid lack of buying interest

• Sellers in Raipur maintain same offers as last week
• Volatile sponge iron, billet tags make buyers cautious

The pellet market in the Raipur region remained range-bound this week, with trading activity largely subdued. Participants noted limited movements, with no confirmed deals during the current publishing window, indicating a cautious stance among buyers amid unclear market cues.

PELLEX, BigMint’s bi-weekly domestic pellet (Fe63%) index for Raipur, remained stable at INR 9,800/tonne (t) ($116/t) DAP Raipur on 6 May compared to the previous assessment on 2 May. Raipur-based pellet producers kept offers for Fe63% (+/- 0.5%) stable at INR 9,600-9,700/t ($114-115/t) exw. Pellet offers (Fe 62.5-63%) from Odisha for Raipur buyers were heard at INR 9,300-9,600/t ($110-114/t) DAP, and some transactions took place due to the competitive pricing. In this publishing window, around 15,000 t of raw pellets were booked from Odisha by Raipur buyers at INR 9,400-9,500/t DAP.

Although Raipur’s pellet offers remained stable, inquiries from steelmakers were dull, and buyers did not show much interest beyond fulfilling immediate requirements. A steelmaker stated, “We have already secured the necessary volumes for now and will wait for more clarity before entering the market again.”

Participants attributed the lack of enthusiasm to recent volatility in sponge iron and billet prices, which has made buyers cautious. A market participant informed BigMint, “Fluctuations in sponge and billet prices are making it difficult to take a firm call on pellet procurement.”

Additionally, sellers faced resistance from buyers, who kept bids lower. A prominent seller stated, “While we are holding offers steady, buyers are quoting much below our expectations, making it tough to conclude deals.”

Market participants expect that the current sluggish trend may persist throughout the week. A source noted, “We do not see much happening unless there is a sharp move in the raw material or finished steel segment.”

Rationale

• PELLEX has been derived using data points, i.e., trades, offers, and bids. To download the detailed methodology, click here.
• Two (2) deals were reported so far in this publishing window, which were not taken for calculations. The T1 trade category was accorded 0% weightage.
• Seventeen (17) firm offers, bids, and indicative prices were heard. Fifteen (15) were taken for price calculation and given the balance 100% weightage.

Factors impacting pellet prices

• Sponge iron tags fall w-o-w: P-DRI prices declined INR 200/t ($2.5/t) w-o-w to INR 24,500/t ($290/t) exw-Raipur on 6 May. Meanwhile, prices decreased by INR 100/t ($1/t) d-o-d. Sponge PDRI deals in Raipur remained largely absent today amid the cautious buying interest.
• Billet prices down w-o-w: Billet prices in Raipur fell by INR 250/t ($3/t) w-o-w to INR 40,250/t ($479/t) exw today. D-o-d, prices dropped by INR 200/t ($2.5/t).

Outlook

As per BigMint’s analysis, pellet trade in central India will remain largely moderate amid need-based buying from steelmakers. However, prices are expected to remain under pressure in the near term.