SteelMint: PELLEX stable even as declining sponge prices pose concerns

SteelMint’s bi-weekly domestic pellet index, PELLEX, remained stable this week at INR 16,200/t, DAP Raipur. No deal was reported in this publishing window. The market is silent and hardly any buying inquiry was heard against current pellet offers, given falling steel margins.

However, as per reports provided by market sources, south India-based pellet producers have been actively exploring the central Indian pellet market what with cost-effective landed prices. SteelMint’s current assessment for pellet (Fe 63%) stands at INR 13,550/t, exw-Bellary, lower by INR 200/t as assessed on 15 Jun’21.

Raipur-based pellet producers have kept offers unchanged, with current offers for Fe 62.5%/63% pellet standing at INR 15,500-16,000/t, exw Raipur. Jharsuguda-based producers have also kept offers stable.

A majority of buyers are showing little interest in taking purchase decisions owing to the gap in bids and offers.

“There is a huge loss on today’s price of iron ore pellet as coal prices are also high which are forcing steelmakers to cut production”, shared a leading Raipur-based buyer.

Pellet sponge (P-DRI) prices in Raipur moved down by INR 450/t w-o-w to INR 30,550/t, exw, against last week’s price at INR 31,000/t. On a daily basis, prices went down by around INR 50/t today.

Indian pellet market overview-: Indian pellet prices across regions exhibited a mixed trend today. Bellary-based iron ore pellet producers decreased offers by around INR 200/t compared to SteelMint’s last assessment earlier this week.

Western India-based Jindal SAW has hiked pellet offers by INR 300/t against its last offer on surging raw materials prices.

Rationale:

• PELLEX has been derived using data points: i.e., trades, offers and bids. You can download the detailed methodology by clicking on this link Click here
• No deal has been reported in this publishing window and hence not considered T1 for index calculation and kept 0% weightage.
• Seven firm offers and indicative prices were reported. Two were from Raipur and the rest from outside the state capital. All the offers were taken for price calculation and given a weightage of 100%.
• SteelMint also received a bid but it did not qualify for calculation of the Index.

Region-wise pellet offers and deal: