India: Domestic pellet prices climb on rise in export offers, raw material prices
Decent pellet export deals at increased offers and hike in sponge and billets prices supported domestic pellet prices. Active pellet export buying inquiries were seen las...
Decent pellet export deals at increased offers and hike in sponge and billets prices supported domestic pellet prices. Active pellet export buying inquiries were seen last month ahead of the Chinese holidays.
Raipur-based sponge makers did not show much interest in buying pellets on elevated offers in coal and raw material.
SteelMint's pellet index, PELLEX increased by INR 1,450/tonne (t) m-o-m to INR 12,150/t DAP Raipur on 28 Jan'22.
Prices in various regions:
- Raipur: Pellet (Fe 63%) offers were assessed at INR 12,000-12,300/t exw in end-January, which rose sharply by INR 1,300/t m-o-m.
- Bellary: Pellet (Fe 63%) prices inched up INR 100/t m-o-m to INR 10,400/t on exw basis in lateJanuary.
- Barbil: Prices of Fe 63% pellets rose by INR 1,700/t to INR 11,000-11,200/t on loaded basis.
- Jharsuguda: Pellet (Fe 63%) prices moved up by INR 1,600-1,700/t to INR 11,500/t exw.
- Jamshedpur: Pellet (Fe 63%) prices increased by INR 1,000-1,200/t to INR 10,700/t exw.
- Kandla: Pellet (Fe 63/64%) prices increased by INR 900/t to INR 12,600/t on DAP basis.
Deals and trade - A total of 503,000 t of confirmed pellet deals were recorded by SteelMint last month.
Factors supporting domestic pellet prices:
- Pellet export prices climb on active deals
Indian pellet export prices saw a significant rise last month following the hike in iron ore prices.
SteelMint's pellet export prices jumped from $20.5/t m-o-m to $150.5/t FOB in the east coast of India in January. Active enquiries and restocking demand from China ahead of the Lunar New Year holidays supported pellet export prices
- Iron ore prices rally on limited availability
Iron ore offers in the domestic market increased owing to limited availability of high-grade ore with merchant miners who have largely exhausted their environmental clearance (EC) limits.
Bids in OMC's lump ore auction increased up to INR 3,600/t over the set base price.
Meanwhile, in NMDC's auction, the entire quantity of DR-CLO got booked at a bid price higher by around INR 1,580-1,670/t over the base price.
Furthermore, the uptrend in global as well as domestic iron ore prices lent support to pellet prices.
- Coal prices surge amidst tight supply
Thermal coal prices saw a significant increase in January amidst limited stock at ports.
An acute coal shortage at RBCT Port in South Africa and limited supply from Indonesia supported portside thermal coal prices.
As per CoalMint's assessment, portside prices of RB2 (5500 NAR) grade coal rose by around INR 3,000/t m-o-m to INR 15,000/t exw-Gangavaram towards the end of January.
- Rally in sponge, billets prices
Domestic sponge iron and billets prices across major markets continued to rise in January.
Prices for P-DRI in Raipur, Chhattisgarh were assessed at INR 32,552 exw in Jan'22, increasing by INR 3,810/t m-o-m.
Meanwhile, the weighted average price for billets last month stood at INR 45,440/t DAP Raipur, an increase of 9% m-o-m.
Pellet prices in the domestic market are likely to be supported in February too, on high coal and other semi-finished offers, SteelMint notes.