Indian Pellet Prices Stable Amid Limited Trade Volumes

Price rally in semi finished steel goods are yet to impact pellet prices. Pellet prices continue to remain at similar levels as they were last week. Durgapur pellet offers are in the range of INR 3,600-3,800/MT (basic).

Chhattisgarh based sponge makers prefer NMDC ore over pellets

Chhattisgarh based sponge iron manufacturers have raised their purchases drastically from NMDC in Dec’15. Till 20 Dec’15, NMDC has dispatched 39 rakes of iron ore to Chhattisgarh based plants. While, in Nov’15 Chhattisgarh based plants procured only 13 rakes of iron ore from NMDC.

Raipur pellet (Fe 63%) offers are in the range of INR 4,000-4,200/MT (basic). And price of NMDC DR-CLO (Fe 67%) is INR 2,180/MT (Royalty, DMF and other taxes extra).

Falling lump offers in Karnataka auctions pressurize pellet offers in South India

“Pellet prices are not showing uptrend despite increase in prices of pellet sponge as some buyers have shifted to domestic lump” shared a pellet maker in Southern India.

Some Bellary based sponge iron manufacturers are procuring lump from Karnataka e-auctions over pellets. Few miners have reduced prices of iron lump in Karnataka e-auctions. In Nov’15, prices of lump (Fe 59.9) offered by Sesa Sterlite was around INR 1,700/MT (basic) which has fallen to INR 900/MT (basic) in Dec’15 auctions.

Market participants based in southern India also stated that Hyderabad market has turned to imported lump. Imported lump from Goa is being preferred over domestic pellets.

Trade-wise:

1. A Raipur based pellet maker concluded a pellet deal with a Nagpur based steel maker at INR 3,950/MT (basic, payment advance, quantity sold above 2,000MT)
2. As per sources an Odisha based pellet maker sold some quantity of pellets at INR 3,900/MT landed at Raipur
3. Shyam Metaliks & Energy concluded a deal of 5,000 MT pellets at INR 3,500/MT (basic)

Indian Pellet Prices as on 21 Dec’15

Basic prices in INR/MT
* loaded to wagons
**delivered, CST extra
Source: SteelMint Research