- Pellet offers remain stable in Raipur post-OMC auction
- OMC fines auction receives INR 250/t m-o-m premium
The Raipur pellet market has witnessed subdued trading activity over the past few days as participants awaited the outcome of the Odisha Mining Corporation (OMC) fines auction. Additionally, a drop in sponge iron prices has kept buyers cautious, leading to a temporary slowdown in trades.
BigMint’s bi-weekly domestic pellet (Fe63%) index remained stable at INR 9,800/t ($113/t) DAP Raipur on 21 February 2025 compared to the previous assessment on 18 February. BigMint recorded no pellet deal in this publishing window amid uncertain market sentiments.
Pellet offers in Raipur for Fe63% (+/- 0.5%) remained stable at INR 9,700-9,800/t ($112-113/t) exw over the past couple of days. One of the major plants kept the sales closed amid the ongoing maintenance shutdown till the beginning of next month. However, Odisha-based pellet producers have maintained their offers in the range of INR 9,300-9,800/t DAP Raipur.
A local sponge iron producer informed, “Pellet prices remained stable following the OMC auction, with bids showing an uptick for iron ore fines. However, buyers are still looking for clarity on the tradable price, which is expected to emerge next week.”
In OMC’s auction for around 1.519 mnt of iron ore fines (Fe 55-65%) on 19 February, around 1.423 mnt (94%) quantity was booked at INR 3,150-5,250/t ex-mines. The bids fetched a premium of INR 50-450/t for a few lots against the set base price. Earlier, the miner had increased the base prices by around INR 200-350/t m-o-m for fines.
A market participant commented: “Most of the buyers are hesitant to conclude deals at current price levels following the volatility in the steel tags. We expect some price adjustments depending on demand and sponge iron ore price trends.”
While some market participants expect a northward revision in pellet prices, buyers are opting for cheaper material in limited quantities, preferring to wait for clearer price trends.
Rationale
- PELLEX has been derived using data points, i.e., trades, offers, and bids. To download the detailed methodology, click here.
- No deal has been reported so far in this publishing window and not taken for calculations. The T1 trade category was accorded 0% weightage.
- Nineteen (19) 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 down w-o-w: P-DRI prices fell by INR 250/t ($3/t) w-o-w to INR 24,550/t ($283/t) exw-Raipur on 21 February. However, prices decreased by INR 150/t ($2/t) d-o-d today. Varying market sentiments influenced buying activity, keeping demand on the lower side for both the semi-finished and finished steel segments throughout the day.
- Billet prices unchanged w-o-w: Billet prices in Raipur remained stable w-o-w to INR 39,350/t ($454/t) exw today. Furthermore, d-o-d, prices inched up by INR 50/t ($0.5/t). The index remained largely stable today, with a slight increase seen towards the end of the trading session.
Outlook
According to BigMint’s analysis, as the market closely tracks price movements, a clearer picture of the central India pellet market is anticipated next week.
A market player said, “The demand outlook remains uncertain, but we might see fresh bookings once price clarity emerges.”
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