SteelMint’s bi-weekly domestic pellet index “PELLEX” increased sharply by INR 600/t on Tuesday (11th Aug’20) to INR 7,800/t DAP on a hike in pellet offers in the Raipur market.
Raipur pellet makers have increased pellet offers twice in the last two days. Some pellet makers from Raipur and areas around the city are still on maintenance shutdowns and not offering pellets in the market.
While a few Raipur based buyers are still interested in booking pellets at current offer prices, some are skeptical about the sustainability of these prices in the near-term.
Some market participants expect NMDC to raise iron ore prices soon amid tight domestic supply, which is supportive for pellet prices. In the downstream sector, P-DRI offer in Raipur increased significantly by around INR 1,500/t to INR 20,500/t exw against INR 19,000/t on 7th Aug.
PELLEX has been derived using five data points: i.e trades, offers, bids, substitute parity, and export realizations. You can download the detailed methodology by clicking on this link Click here
Assigning weightage to data points:
- One transaction of 1,000 t was reported yesterday at INR 7,950/t (DAP, Raipur) by a Raipur based pellet maker. This transaction was given a 66.7% weightage in the index.
- Two firm offers were reported this week at INR 8,150/t (DAP, Raipur) and the rest three from outside Raipur at INR 8,200-8,300/t (DAP, Raipur) which have been given a weightage of 16.7%.
- No firm bids were reported in this publishing window.
- SteelMint calculated the price at which Raipur pellet can displace NMDC lump in the sponge rotary kiln feed (substitute parity) on a DAP Raipur basis at INR 6,500/t and given a weightage of 16.7%.
- The export realization factor has not been considered as pellet makers are less active in exports owing to an increase in domestic demand.
Calculation of Index:
Source-: SteelMint
Region-wise pellet deals and offers:
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