Weak Market Sentiments Lower PELLEX by INR 200/MT

SteelMint pellet Index (PELLEX) moved down further by INR 200/MT to 6,250/ MT (DAP Raipur) against the last index published on 06th Aug’19 amid continuous falling indications in the export market and reduction in offers by pellet makers. No deals reported in this publishing window. Raipur based plants’ have further cut their offers by INR 300 to INR 6,350/MT (DAP Raipur). Total cut in offers this week by Raipur pellet makers was INR 600/MT this week. Jharsuguda (Odisha) based pellet maker is offering pellet at INR 5,500/MT( Ex-plant); normalizing for freight to Raipur at INR 6,200 – 6,250 (DAP Raipur).

SteelMint’s Pellet export realization for standard grade pellet has come down to USD 100-105/MT FoB (Al 3% ); due to sluggish buying in China. Market sentiments in the pellet export market turned very weak after a sharp decline in global iron ore fines index by USD 13/MT W-o-W.

NMDC Production and dispatches are negatively impacted because of monsoons. However, procurement from Odisha seems to be competitive.

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

SteelMint will continue to monitor changes in the pellet markets and will adjust its methodology in accordance with the market participants.

To provide feedback/suggestions, please contact  info@steelmint.com

Click here to see SteelMint Pricing methodology and Rationale documents.