- Raipur pellet offers increase by INR 200/t w.e.f today
- Buyers procure on need basis at previous offers
Pellet prices in Raipur increased today, as local producers raised their offers, citing active deals and firm sentiment in the raw material market. However, following the hike, trading activity remained sluggish, as most market participants had already secured sufficient material at earlier, lower rates. Additionally, a recovery in PDRI prices, driven by the shutdown of some plants, supported pellet prices in Raipur.
Price movements, trades
PELLEX, BigMint’s bi-weekly domestic pellet (Fe63%) index for Raipur, rose by INR 200/t ($2.5/t) to INR 9,100/t ($106/t) DAP Raipur on 8 July compared to the previous assessment on 4 July.
Raipur-based pellet producers hiked their offers for Fe 62/63% (+/_0.5%) material by INR 200/t ($2.5/t) to INR 8,900-9,000/t ($104-105/t) exw. Active trades of approximately 150,000 t were concluded last week by local sellers, amid expectations of higher seasonal demand during the monsoon. However, no trades have been recorded at the revised prices so far.
Deals for around 25,000 t were recorded in Raipur this week, concluded by local sellers at the old offers of INR 8,700-8,800/t exw.
Pellet (Fe 62.5-63%) offers from Odisha for Raipur buyers were heard at INR 8,800-9,200/t ($103-107/t) DAP. Around 10,000 t of pellets (Fe63%) were procured from Odisha at INR 8,900/t DAP Raipur recently.
Market scenario
A local buyer stated, “Sellers had concluded deals for substantial volumes last week, which gave them room to hike offers. However, at current prices, no fresh deals are being finalised.”
Another buyer echoed this sentiment, saying, “We booked enough quantity last week at old prices. Currently, we are not placing any new inquiries for pellets at revised rates.”
The absence of trades from Odisha-based pellet suppliers to Raipur buyers further confirms the subdued market environment. Market sources indicated that local offers in Raipur remain more competitive, making Odisha material unviable for buyers in the central India region.
Meanwhile, sponge iron and billet prices remained firm over the past week, though market sentiments continued to lag. As such, pellet buyers were cautious and waited for clarity in price trends before engaging in further procurement.
A trader noted, “The current price hike is more of a supplier-driven move, not based on actual demand. Only need-based buying is likely to take place unless there is a significant shift in steel prices or downstream demand.”
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 not all were taken for calculations. The T1 trade category was accorded 50% weightage.
- Fifteen (15) firm offers, bids, and indicative prices were heard. Fourteen (14) were taken for price calculation and given a balance of 50% weightage.
Key market drivers
- Sponge iron tags rise sharply d-o-d: P-DRI prices increased by INR 550/t ($7/t) d-o-d to INR 23,250/t ($271/t) exw-Raipur on 8 July. Meanwhile, prices rose INR 850/t ($10/t) w-o-w. In the Raipur market, approximately 10-11 sponge iron mills have undertaken maintenance shutdowns, leading to an estimated production loss of around 3,000 t/per day. This temporary shutdown led to an increase in demand and supported sponge pellet prices. Some active trades were witnessed today in the Raipur region.
- Billet prices up d-o-d: Billet prices in Raipur remained stable w-o-w to INR 37,000/t ($432/t) exw today. Prices saw a hike of INR 250/t ($3/t) d-o-d.
Outlook
According to BigMint, the prices are expected to remain volatile this week, with trading confined largely to need-based procurement amid uncertain market cues.
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