SteelMint: PELLEX remains range bound in absence of trades

SteelMint’s bi-weekly domestic pellet index “PELLEX” stands at INR 12,200/t DAP Raipur, marginally up by INR 50/t. No pellet deal has been reported in this publishing window. The market remained silent and bids of few key buyers were heard lower by INR 200/t than current offers. However, pellet sponge (P-DRI) prices in raipur have increased by INR 100/t d-o-d.

Raipur based pellet makers have kept their offers stable. The current offers stand around INR 12,150-12,450/t (DAP, Raipur). Pellet offers from Jharsuguda are at 12,150/t (DAP Raipur).

Market awaits NMDC’s iron ore price revision. NMDC conducted two iron ore auctions on 30 Dec’20 for around 100,800 t from its Bacheli mines and 25,200 t from its Kirandul mines, Chhattisgarh. Offered material comprised of 71,400t fines, 16,800t ROM, 29,400t DR CLO and 8,400t lump. Bids for DR CLO increased sharply by around INR 3,700/t, ROM by INR 500/t and fines by INR 200/t above the set base price, sources reported SteelMint.

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.

• No deal has been concluded in this publishing window therefore not considered for price calculation and weightage given 0%.
• Four firm offers from Raipur players were reported this week and all offers were taken for price calculation at INR 12,150-12,450/t (DAP, Raipur) and the rest three from outside Raipur at INR 12,150-12,600/t (DAP, Raipur) and given a weightage of 100%.
• No firm bid was reported in this publishing window hence not considered for price calculation and given weightage 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 10,700/t and given a weightage of 0%.
• The export realization factor was not considered owing to no firm deals being reported. Hence, pellet export realization was given a weightage of 0%.

Calculation of Index:

Source-: SteelMint

Region-wise pellet deals and offers: