SteelMint’s bi-weekly domestic pellet index “PELLEX” has decreased by INR 200/t to INR 11,600/t DAP Raipur today (24th Nov’20). Two deals have been concluded by Raipur and Odisha-based pellet maker in this publishing window.
However, Godawari Ispat Ltd has decreased pellet offers to INR 11,500/t (ex-plant) recently. Other pellet makers in Raipur have kept the offers unchanged at INR 11,500/t (ex-plant).
In addition to it, Serajuddin is reported to have sold around 500,000 t of high-grade iron ore fines, for the first time since the company managed to retain its mine in the auction conducted in Mar ’20 signaling some ease in availability issues. However, SteelMint learnt that the company is unlikely to offer significant quantities in the coming months. Serajuddin, like other new lessees operating auctioned mines, is seriously constrained by “stacking” issues. Thus it seems, buyers are adopting a ‘wait & watch’ approach for placing fresh pellet orders.
Pellet sponge (P-DRI) prices also decreased sharply by around INR 1,050/t w-o-w to INR 24,350/t exw, Raipur. On a daily basis, sponge price assessment has come down by INR 450/t.
Market overview-: Pellet prices in Bellary have remained largely stable. However price indications in eastern India markets – like Barbil and Jharsuguda have softened. Western India based pellet maker – Jindal SAW has raised pellet offers by INR 400/t to INR 11,000/t (DAP Kandla).
Rationale – 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.
- Two pellet deals have been concluded recently out of that Odisha based pellet maker sold 5,000 t pellet for Raipur around at INR 11,550-11,650/t (DAP, Raipur). In another deal a Raipur based pellet maker sold 10,000 t pellet to outside Raipur based unit at INR 11,550/t(DAP, Raipur) yesterday. Both deals were taken into consideration for price calculation and weightage given 80%.
- Four firm offers were reported this week and all offers were taken for price calculation at INR 11,650/t (DAP, Raipur) and the rest four from outside Raipur at INR 11,350-11,800/t (DAP, Raipur) and given a weightage of 20%.
- No firm bids reported and not considered in price calculation in this publishing window, and given a weightage of 0%.
- 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 9,200/t and given a weightage of 0%.
- The export realization factor has not been considered as pellet makers are less active in exports owing to an increased domestic realization.
Calculation of Index:
Source-: SteelMint
Region-wise pellet deals and offers:
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