- Bids for pellets remain lower than offers
- Fines, DR-CLO lots fetch premiums in NMDC auction
- Bids remain lower m-o-m in OMC’s iron ore auction
BigMint’s bi-weekly domestic pellet (Fe 63%) index remained stable at INR 9,550/t DAP ($115/t) Raipur on 20 February 2024 compared to the last assessment on 16 February. A deal of 10,000 t was recorded at INR 9,550/t DAP Raipur in this publishing window. Buyers remained cautious about booking fresh material in the expectation of a price reduction by local plants. However, one major plant from Raipur increased offers by INR 200/t to INR 9,600-9,700/t exw recently.
Pellet prices in Raipur remained largely stable this week. Most of the buyers remained sidelined – largely in a wait-and-watch mode. A few buyers were waiting for NMDC’s iron ore price revision for March.
A buyer source said, “The recent OMC auction gave hope to buyers that pellet prices may fall in the coming days, as yesterday’s bids in the auction were lower than last month’s bids. NMDC iron ore prices revision is also pending in this scenario.”
OMC conducted an auction for 2.79 mnt of iron ore (Fe 54-65%) on 19 February and the entire quantity of fines (1.546 mnt) and 1.09 mnt (88% of the offered quantity) of lumps were booked. Bids for fines increased by INR 100-1,050/t against the base prices while the majority of the lots were booked at base prices, and bids increased by INR 50-1,700/t over the base price for some lots. However, bid prices fell up to INR 850/t and INR 700/t for the majority of lots of fines and lumps against OMC’s Jan auction owing to a drop in pellet and sponge iron offers in central and eastern India.
A trader said, “Sponge pellet prices increased this week by around INR 400-500/t but local sponge iron makers stayed away from bookings. A few buyers are getting INR 200-300/t less in landed prices from Odisha against local offers.”
NMDC Bacheli had conducted an auction for 88,200 t iron ore from Chhattisgarh on 17 February. According to sources, 16,800 t of DRCLO (10-40mm, Fe67%) got booked at INR 8,280/t against the base price of INR 7,220/t. In addition, 67,200 t of fines (Fe64%) was booked at INR 6,510/t against the base price of INR 5,310/t, but 4,200 t ROM (10-150mm, Fe65.5%) remained unsold. Prices were FOR, ex-mines basis inclusive of taxes.
Rationale
- PELLEX has been derived using data points, i.e., trades, offers, and bids. To download the detailed methodologyClick here.
- One deal has been reported so far this week, and has taken into account for price calculation and accorded 50% weightage for T1 trade.
- Eleven (11) firm offers, bids, and indicative prices were heard. Seven (7) were taken for price calculation and given the balance 50% weightage.
Market highlights
- Raipur pellet offers stable: Godawari Power and Ispat Ltd (GPIL) kept pellet (Fe 63% +/-0.5) offers stable at INR 9,800/t ($118/t) exw-Raipur on 16 February. Offers of other major pellet players in the region remained stable at INR 9,400-9,500/t ($113-114/t) exw.
- P-DRI prices in Raipur rise w-o-w: BigMint’s P-DRI (FeM 80%) prices remained stable d-o-d at INR 26,500/t exw on 20 February. However, the assessment for the sponge in Raipur increased by INR 450/t w-o-w today. India’s sponge iron market witnessed a rise in prices today ranging from INR 50-350/t in almost all major locations. This can be attributed to active spot trading coupled with buying interest.
- Billet prices in Raipur up w-o-w: Billet prices in Raipur remained largely stable d-o-d at INR 39,400/t exw on 20 February. Prices increased by INR 50/t w-o-w. The index remained range-bound, with a modest increase in spot prices owing to firm market sentiments today. However, only nominal transaction volumes were recorded, as buyers had placed sufficient bookings over the last few days.
Outlook
The pellet market in Raipur is expected to remain under pressure in the coming days. However, the market will attain price clarity after NMDC’s iron ore price revision.