India: PELLEX rises by INR 250/t ($3/t) on hike in offers, sponge price increase

• Pellet offers in Raipur increase by INR 200-300/t
• Sponge PDRI, billet tags up INR 800-900/t w-o-w

Pellet prices in Raipur increased in the initial part of the week, driven by a rise in offers from local producers. The recent increase in sponge PDRI and billet prices contributed to the uptrend. Furthermore, active pellet export deals from the East Coast provided additional support to this price escalation.

BigMint’s bi-weekly domestic pellet (Fe63%) index increased by INR 250/t ($3/t) to INR 9,750/tonne (t) ($113/t) DAP Raipur on 28 January 2025 compared to the previous assessment on 24 January. No deals were concluded by local steelmakers in this publishing window.

However, market trades remained subdued despite the price hike as buyers exercised caution before committing to higher-priced raw materials.

A steelmaker commented: “The current market sentiment is mixed. While producers are optimistic on export demand, buyers are hesitant to procure raw materials at elevated prices.”

Pellet makers in the region increased offers for Fe63% (+/_0.5%) by INR 200-300/t ($2.5-3.5/t) to INR 9,600-9,800/t ($111-113/t) exw. Few Odisha-based sellers offered raw pellets (Fe62.5-63%) at INR 9,400-9,800/t ($110-113/t) DAP Raipur, but deals have not yet been concluded. Notably, Raipur-based suppliers kept sales on hold, stating that they were focusing on dispatching previously booked orders.

A trader said: “The uncertainty surrounding price sustainability has left market participants unsettled. Many steelmakers believe that the long-term trajectory of prices will likely become clearer after the finance minister’s submission of the Union Budget in Parliament in end-February.”

A seller informed, “We are currently not offering as dispatches linked to our previous deals are still pending. Fresh offers from our end are is yet to be announced.”

Rationale

• PELLEX has been derived using data points, i.e., trades, offers, and bids. To download the detailed methodology, click here.
• No deals have been reported so far in this publishing window and not taken for calculations. Thus, the T1 trade category was accorded 0% weightage.
• Sixteen (16) firm offers, bids, and indicative prices were heard. Thirteen (13) were taken for price calculation and given the balance 100% weightage.

Factors driving PELLEX

• Sponge iron prices up w-o-w: P-DRI prices rose by INR 800/t ($9/t) w-o-w to INR 24,900/t ($288/t) exw-Raipur on 28 January. Meanwhile, prices remained stable d-o-d today. However, buying activity during today’s trading session remained limited as d-o-d fluctuations and higher offers led buyers to adopt a wait-and-watch approach.
• Billet prices rise w-o-w: Billet prices in Raipur increased by INR 900/t ($10/t) w-o-w to INR 39,500/t ($456/t) exw today. Furthermore, d-o-d, prices moved up by INR 100/t ($1/t). The index saw a marginal increase today, supported by an upward market trend and influence from neighbouring markets. However, buying activity in the semi-finished and finished steel segments remained subdued due to ongoing market volatility.
• Active pellet exports deals: An Odisha-based maker concluded deals of around 120,000 t (Fe 63%, 7-8% AL2O3+SiO2) last weekend at $111-113/t CFR China for February shipment. Another seller concluded a 55,000-t (Fe63%) export deal at $113/t CFR China.

Outlook

According to BigMint’s analysis, the Raipur pellet market is expected to remain volatile and sentiments may be clearer post-the Union Budget.