SteelMint pellet Index (PELLEX) moved down by INR 100/MT to 6,650/ MT against the last index published on 30th Jul’19. Index moved down because of a transaction being concluded at lower price from neighboring states. Also, lower demand this week for pellets in China resulted in the lowering of pellet export realization.
Deal for 5,000 MT reported at INR 5,850/MT (Ex plant) from Odisha based plant; normalizing for quality and freight to Raipur at INR 6,600 (DAP Raipur).
Raipur based plants’ leave their offers unchanged at INR 6,900 – 6,950/MT (DAP Raipur) on export orders made early this month; few plants are looking for export bookings and are not willing to sell in the domestic market at lower price.
Sponge makers have curtailed production due to losses and thus buying interest remains thin.
This is the beta version. SteelMint will continue to monitor changes in the pellet markets and will adjust its methodology in accordance with the market participants.
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 a 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
To provide feedback/suggestions, please contact info@steelmint.com
Click here to see SteelMint Pricing methodology and Rationale documents.
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