Pellet Buying Remains Low on the Backdrop of High Prices

Week 35 noticed significant increase in Indian pellet prices. Cheaper lump has grabbed attention of sponge manufacturers and further price cut might compel them to shift from pellet to lump.

High Prices, Low Volumes

1. Pellet prices in eastern India surged by INR 100-500/MT W-o-W. Jindal Steel & Power raised its offers by INR 350/MT to INR 4,750/MT (loaded to wagons). Following its price hike and strengthening pellet sponge prices, other pellet makers in eastern India had also raised their prices by the end of last week
2. Durgapur pellet prices have moved up and are in the range of INR 5,000-5,400/MT (basic). Jharsuguda pellet prices have also increased to INR 5,000/MT (basic). Pellet offers in Keonjhar are at INR 4,500/MT (loaded to wagons)
3. Although pellet prices have moved up, no noticeable bookings were seen. Market is anicipating price cut in iron ore in regions of Odisha and Chhattisgarh. Further price cut will make lump comparitively cheaper than pellet, which might shift attention of sponge manufacturers from pellet to lump. Current offers for 5-18 mm (Fe 63%) are at INR 3,200/MT; 10-30 mm (Fe 63%) is in the range of INR 2,500-2,700/MT and fines (Fe 63%) is at INR 1,500/MT ex-mines basis
4. Pellet prices in central India have moved up by INR 100/MT W-o-W. Current offers for Fe 63% pellets are in the range of INR 5,200-5,400/MT (basic). Jayaswal Neco is offering pellets (Fe 63%) at INR 5,500/MT (after considering VAT exemption)
5. Pellet prices in southern India have increased over strengthening pellet sponge prices. Current offers for Fe 63% pellets in Bellary are in the range of INR 4,800-4,900/MT (basic)
6. On the other hand, prices in western India remain stable. Jindal Saw is offering Fe 63% pellets at INR 5,350/MT, delivered Kandla

Indian Pellet Prices

Basic prices in INR/MT
*loaded to wagons
**delivered 
Source: SteelMint