SteelMint: PELLEX increases by INR 150/t following hike in offers

SteelMint’s bi-weekly domestic pellet index “PELLEX” increased by INR 150/t to INR 12,350/t DAP Raipur. Index increased owing to hike in offers by Raipur pellet makers following NMDC iron ore price rise.

Raipur based pellet makers have increased offers by INR 300/t towards the mid of this week. The current offers stand around INR 12,450-12,750/t (DAP, Raipur). However, no pellet deal has been observed at increased offers in Raipur.

Pellet offers from Jharsuguda have remained stable at 12,150/t (DAP Raipur). One confirmed pellet deal has been reported in this publishing window from Odisha.

National Mineral Development Corporation (NMDC) has announced price hike for Baila fines and lump by around INR 200/t and INR 500/t respectively while that of DR CLO by INR 580/t for Jan’21.

Despite hike in the NMDC prices this week, most of the buyers is still interested to buy DR-CLO and lumps as it is much lucrative than pellets for fetching a decent margin.

However, pellet sponge (P-DRI) prices in Raipur have increased slightly today by INR 100/t to INR 26,100/t ex-plant after witnessing a constant decline this week from INR 26,600/t exw levels.

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.

• One deal has been concluded in this publishing window from Odisha for 10,000 t at INR 12,350/t (DAP, Raipur) therefore it was considered for price calculation and weightage given 66.7%.
• Four firm offers from Raipur players were reported this week and only three offers were taken for price calculation at INR 12,450/t (DAP, Raipur) and the rest four from outside Raipur and only three were taken for price calculation at INR 12,150-12,300/t (DAP, Raipur) and given a weightage of 16.7%.
• 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 11,000/t and given a weightage of 0%.
• The export realization factor was considered for price calculation, as ex-plant realization for domestic and export have come at par with hike in global prices. Hence, pellet export realization has been given a weightage of 16.7%.

Calculation of Index:

Source-: SteelMint

Region-wise pellet deals and offers: