- Suppliers keep offers firm despite falling sponge prices
- No pellet deals concluded from Odisha sellers in Raipur
Pellet prices in the Raipur market remained stable this week as trading activity picked up slightly, driven by need-based bookings from plant operators. Despite the absence of robust demand, several buyers booked small quantities of raw pellets to ensure uninterrupted operations.
Price movements
PELLEX, BigMint’s bi-weekly domestic pellet (Fe63%) index for Raipur, remained stable at INR 9,150/t ($107/t) DAP Raipur on 27 June compared to the previous assessment on 24 June. Raipur-based pellet producers kept their offers for Fe 62/63% (+/_0.5%) material stable at INR 9,000-9,100/t ($105-106/t) exw.
Around 36,000 t of pellet deals were recorded in Raipur in the last couple of days, concluded by the local sellers. The deals were heard to have concluded at INR 9000-9,100/t exw.
Pellet (Fe 62.5-63%) offers from Odisha for Raipur-based buyers were heard at INR 8,600-9,200/t ($100-107/t) DAP. No trades were recorded in this publishing window from Odisha.
NMDC conducted an auction for 193,200 t of iron ore from its Bacheli mines, Chhattisgarh, on 26 June. The entire 17,200-t DRCLO (10-40 mm, Fe 67%) lot was booked at a base price of INR 7,110/t. Meanwhile, around 172,000 t of Baila fines (Fe 64%) and 4,000 t of Baila lumps (10-20 mm, Fe 65.5%) remained unsold.
Market updates
A market participant noted, “The market is witnessing need-based procurement. Buyers are cautious and are only purchasing limited volumes to meet immediate requirements. There is no strong bulk demand yet.” This sentiment was echoed by others, highlighting the current conservative buying behaviour.
Suppliers, on the other hand, are reluctant to lower their offers despite the ongoing decline in sponge PDRI prices. One seller commented, “We are keeping our offers stable. Although sponge iron prices are falling, we recently received some inquiries and managed to close a few deals at the current levels.”
Some transactions reportedly took place at discounted prices as sellers looked to move material in a sluggish market. However, these deals remained localised, with no pellet purchases recorded by Raipur buyers from Odisha this week. A buyer mentioned, “Due to the availability of material from local sellers and past stagnation in sales, buyers opted for nearby sources, avoiding procurement from Odisha.”
Another buyer remarked, “After a long pause in pellet procurement, a few deals finally happened this week simply because of immediate material required for plant operation.”
Rationale
- PELLEX has been derived using data points, i.e., trades, offers, and bids. To download the detailed methodology, click here.
- Three (3) deals were reported in this publishing window and two were taken for calculations. The T1 trade category was accorded 50% weightage.
- Twenty (20) firm offers, bids, and indicative prices were heard. Sixteen (16) were taken for price calculation and given a balance of 50% weightage.
Key market drivers
- Sponge iron tags stable w-o-w: P-DRI prices remained largely stable w-o-w at INR 22,350/t ($261/t) exw-Raipur on 27 June. Meanwhile, prices moved down by INR 250/t ($3/t) d-o-d. Trades were absent in today’s trading session amid the lower bids from the buyers.
- Billet prices down w-o-w: Billet prices in Raipur decreased by INR 250/t ($2-3/t) w-o-w to INR 37,050/t ($433/t) exw today. Prices saw a fall of INR 250/t ($3/t) d-o-d. Buying activity and overall participation were subdued, as most market players had already secured material in recent sessions. This led to cautious sentiment around sustainability of higher offers, going forward.
Outlook
According to BigMint, pellet prices are expected to stay stable due to firm raw material costs and some recent trade activity, though broader demand revival remains uncertain.
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