- Muted inquiries for new orders
- Prices may be revised in the near term
Pellet prices in Raipur remained largely stable this week as buying sentiment stayed muted among local steel producers. Despite steady offers from suppliers no major deals were concluded, reflecting the cautious stance adopted by buyers amid uncertain market fundamentals.
Price movements, trades
PELLEX, BigMint’s bi-weekly domestic pellet (Fe63%) index for Raipur, remained stable at INR 9,650/t ($108/t) DAP on 2 December compared to the previous assessment on 28 November. Demand was limited in the last couple of days, with no deals reported by Odisha or local pellet suppliers.
Raipur-based producers kept their offers for 63% (+/-0.5%) stable at INR 9,500-9,600/t ($107-108/t) exw recently. Some Odisha-based sellers offered material in Raipur at INR 9,600-10,000/t DAP.
Market scenario
Market sources indicated that local steelmakers showed reluctance to enter into new bookings, even though prices for sponge iron and billets remained supportive ow-o-w. A Raipur-based steelmaker informed, “The fundamentals are not fully aligning. Sponge iron prices look better but mills are not confident about pellet bookings at current levels.”
Sellers, on the other hand, continued to hold offers unchanged over the past few days as they await clearer market signals. A prominent supplier in Raipur is expected to release fresh offers in the next couple of days, potentially with changes in pellet specifications to attract buyers.
A supplier mentioned, “We are offering the same prices but inquiries are muted as regular buyers are not even showing interest at current offers due to poor market dynamics.”
The situation is further influenced by regional dynamics. Odisha-based pellet offers remained higher for Raipur buyers, limiting inter-state trade and discouraging procurement from neighbouring markets. Another market participant noted, “Odisha pellets are currently unviable due to pricing and freight. Most Raipur units are avoiding purchasing from the neighbouring region.”
Market participants expect volatility in prices as suppliers roll out fresh offers and mills reassess raw material procurement. Some trades may materialise once the prominent supplier issues updated offers.
A trader said, “A few deals could happen at revised price points but the market will stay sensitive to sponge iron trends.”
Rationale
- PELLEX has been derived using data points, i.e., trades, offers, and bids. To download the detailed methodology, click here.
- No deals were recorded in this publishing window, not taken under calculations, and thus, this category was considered for calculation. Thus, the T1 trade category was accorded 0% weightage.
- Thirteen (13) firm offers, bids, and indicative prices were heard. Eleven (11) were taken for price calculation and given a balance of 100% weightage.
Key market drivers
- Sponge iron prices rise w-o-w: Sponge iron prices rose by INR 300/t ($3.5/t) w-o-w on 2 December to INR 23,900/t ($267/t) exw-Raipur. However, prices remained unchanged d-o-d. Deals were fewer in the Raipur market today on cautious buying.
- Billet prices up w-o-w: BigMint’s billet index increased by INR 750/t ($8/t) w-o-w, settling at INR 36,700/t ($404/t) exw-Raipur on 2 December. Prices rose by INR 200/t ($2/t) d-o-d. Buyer activity stayed subdued throughout the session, as most buyers awaited clearer direction. Mills continued to report soft inquiries from downstream consumers, which led to limited procurement. On the supply side, producers attempted to keep offers on the higher side, supported by selective billet bookings to nearby markets and expectations of improved demand.
Outlook
The Raipur pellet market remains in a wait-and-watch mode, with short-term fluctuations likely.
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