Following a market survey between May-July, SteelMint proposes to launch an index for pellet on a DAP (Delivered Price – Plant site) in Raipur basis. The index will be published as INR per tonne twice every week on Tuesday & Friday. The publication time is 18:30 hrs on IST.
This is the beta version. SteelMint will continue to monitor changes in the pellet markets and will adjust its methodology as per market dynamics.
Why PELLEX? India has installed pellet capaci1ty of 85 MnT pa and an annual production of around 65-66 MnT. 5 major states – Odisha (28.9 MnT), Karnataka (19.5 MnT), Chhattisgarh (9.6 MnT), Jharkhand (8.4 MnT) and Andhra Pradesh (8 MnT) – covers around 85-90% of the capacity. Based on the above we have chosen Raipur as our index base as this market seems more active from a domestic merchant trading perspective along with exports. Also, Chhattisgarh has a good base for sponge iron makers (DRI) who procure a decent amount of pellets.
These factors have led SteelMint to launch this index of PELLET on DAP Raipur basis.
The proposed specifications, along with delivery terms were devised following consultation with market participants. They are as follows:
1. Fe Content – Fe 63-64%
2. Combined Silica & Alumina – 7%
3. Trade Size – 2,500-10,000 MT
4. Payment terms – Advance
Today’s market sentiments-:
As per the market report, transaction for 5,000-6,000 MT reported at INR 6500-6600/MT (DAP Raipur) a couple of days back. Raigarh based pellet maker concluded pellet deal to Raipur for INR 6,000/MT (ex-plant) recently.
One export deal for 50,000 MT (>2%) was concluded at USD 135/MT, CFR China (equivalent to USD 119-120 FoB India). As per SteelMint methodology, pellet export rate has been normalized for standard grade pellets at USD 117-118/MT FoB.
Buying interest heard for small quantities to satisfy the urgent and immediate needs of the raw material. Some DRI plants have Pellet/ Lumps stock in hand and are not interested to buy at the current offer
To provide feedback/suggestions, please contact info@steelmint.com
Click here to see SteelMint Pricing methodology and Rationale documents
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