- NMDC hikes iron ore prices by INR 150-200/t for June
- Sponge PDRI, billet prices fall INR 500-700/t w-o-w
PELLEX, BigMint’s bi-weekly domestic pellet (Fe 63%) index for Raipur, remained stable at INR 9,400/t ($99/t) DAP on 5 June against 2 June.
Pellet prices in the Raipur region remained largely stable this week, with moderate trading activity reported over the last few days. Market sentiment received some support after iron ore producer NMDC increased its iron ore prices for June deliveries in Chhattisgarh, partially offsetting the impact of recent price cuts announced by local pellet manufacturers.
Rationale
- PELLEX has been derived using data points, i.e., trades, offers, and bids. To download the detailed methodology, click here.
- Five (5) deals were recorded in this publishing window, and all were taken for calculation. Thus, the T1 trade category was accorded 50% weightage.
- Twelve (12) firm offers, bids, and indicative prices were heard, and seven (7) were taken for price calculation and given the balance 50% weightage.
Price movements and offers
Pellet manufacturers in Raipur kept offers stable for Fe 62.5/63% (+/-0.5%) grade pellets at INR 9,200-9,300/t ($97-98/t) exw. Deals for around 45,000 t of pellets were concluded by local pellet producers at INR 9,200-9,400/t exw in this publishing window.
NMDC has increased its list prices of iron ore CLO (calibrated lump ore) and fines on 2 June, BigMint learnt from sources. The miner has fixed prices of DR CLO (10-40 mm, Fe 67%) at INR 6,350/tonne (t) ($67/t) and of iron ore fines (-10 mm, Fe 64%) at INR 4,850/t ($51/t). Prices are on FOR basis from the miner’s Bacheli complex and exclude royalty, DMF, and NMEDT. Prices of all grades rose in the range of INR 150-200/t.
Earlier, several pellet producers in Raipur had reduced their offers by around INR 200/t in an effort to stimulate demand amid weak downstream steel market conditions. However, the recent increase in NMDC’s iron ore prices has provided some cost support to pellet producers and helped sustain trading activity in the region.
Market scenario
Sponge iron and billet prices remained under strain throughout the week due to subdued demand and weak liquidity in the market. Nevertheless, pellet procurement on a need basis continued as steelmakers maintained minimum raw material inventories.
A steelmaker from the region noted “The combination of higher iron ore prices and drop in pellet offers could improve buying interest in the coming days. However, he added that most buyers remain cautious and are waiting for stronger signals from the downstream steel market before making aggressive purchases.”
Another steelmaker mentioned, “Recent corrections in pellet prices have made procurement more attractive, but liquidity remains a concern. Buyers are closely monitoring finished steel demand before committing to larger volumes.”
Meanwhile, a pellet seller reported that inquiries remain relatively slow, although trading activity has been supported by the absence of a prominent supplier from the market. According to the seller, the temporary reduction in available material has allowed other producers to fill the supply gap and conclude transactions.
A buyer said, “The cautious sentiment, stating that the market continues to face pressure due to the lack of meaningful improvement in semi-finished and finished steel segments.”
Key market drivers
- Sponge iron prices fall w-o-w: Sponge PDRI prices dropped by INR 650/t ($7/t) w-o-w to INR 24,450/t ($257/t) exw Raipur on 5 June. Prices remain stable d-o-d, with trading activity remained sluggish, with buyers limiting purchases to immediate requirements and continuing to place bids at lower levels. Weak participation across the market kept overall booking volumes under pressure throughout the day.
- Billet prices drop w-o-w: BigMint’s billet index in Raipur fell by INR 500/t ($5/t) w-o-w to INR 38,800/t ($408/t) exw on 5 June. Meanwhile, the index remain unchanged d-o-d. Market sentiment remained weak due to subdued downstream demand and limited enquiries from buyers. Despite minor price adjustments by sellers, procurement activity remained restrained, with participants adopting a wait-and-watch approach amid uncertainty over the pace of finished steel demand recovery.
Outlook
As per BigMint’s analysis, pellet prices in Raipur are expected to remain range-bound over the next few days. However, if weakness persists in downstream steel markets, market participants anticipate the possibility of further price corrections during the coming week.
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