Pellet Buying Remains Subdued on Fall in P-DRI Prices, Downside Limited

Few east India pellet makers reduce offers amid dull demand

1. Arya Iron & Steel has reduced pellet offers by INR 100/MT to INR 3,000/MT (loaded to wagons)
2. Durgapur pellet offers which were hovering in the range of INR 3,500-3,800/MT (basic) in previous week have declined to INR 3,400-3,800/MT (basic)
3. P-DRI prices in east India have fallen by INR 200/MT W-o-W
4. Downside seems to be limited since pellet manufacturers are in talks to execute export deals. Export realisation to ex-works are at INR 3,000-3,100/MT at present USD 73/MT, CFR China

Raipur pellet offers decline by INR 150/MT in a month’s time-Pellet offers in Raipur have declined and are currently seen in the range of INR 4,200-4,400/MT (basic).

”P-DRI prices in Raipur have fallen by INR 300-500/MT in a week’s time to INR 11,300/MT (ex-works) for 80 FeM. Comparatively C-DRI prices in Raipur for 80 FeM are at INR 12,750/MT (ex-works). Higher margins in sponge iron against pellet sponge continues to attract buyers towards lump over pellets.

Another reason behind sharp fall in sponge iron prices was shutdown of Raigarh based units in Jindal Industrial Park which instilled selling pressure for sponge iron in Raipur as well. No significant pellet buying was seen at INR 4,400-4,500/MT levels following which pellet makers have reduced offers this week” shared a Raipur based pellet maker.

Southern India pellet offers rise marginally-Pellet offers in southern India have increased slightly this week. Offers for 63% pellets are in the range of INR 4,250-4,450/MT (basic). Both NMDC as well as private miners have raised iron ore prices in Apr’16 Karnataka e-auctions.

Indian Pellet Prices as on 19 Apr’16

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