SteelMint: PELLEX falls by INR 100/t on competitive offers from nearby regions

SteelMint’s bi-weekly domestic pellet index, PELLEX, fell by INR 100/t to INR 15,800/t, DAP Raipur, on competitive pricing from other states. Although no deal was reported in this publishing window, bids have fallen considerably on declining sponge iron prices and falling margins.

As per sources, buyers are trying out material on a sample basis to check the feasibility for placing further orders for pellets from southern India. However, transportation-related bottlenecks have kept some buyers hesitant. Notably, Bellary pellet prices have declined to a two-month low and are hovering at around INR 12,400-12,500/t exw.

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

Raigarh-based producers have decreased offers by around INR 500/t to INR 15,000/t, exw. Jharsuguda-based pellet makers have also kept offers stable at INR 15,000/t, exw, while buying interest is around INR 200-300/t lower than the prevailing offers.

P-DRI prices in Raipur have moved down further by INR 900/t w-o-w to INR 29,100/t, exw, against last week’s price at INR 30,000/t. SteelMint’s benchmark sponge P-DRI (FeM 80%) prices fell by INR 100/t d-o-d on 2 Jul’21.

Indian pellet market overview-: Indian pellet prices across regions continue to drop further by around INR 100-950/t this week. SteelMint’s assessment for Barbil iron ore pellet (Fe 63%) stands at INR 14,500-15,000/t, loaded, a sharp fall of INR 950/t compared with the last assessment on 29 Jun.

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 given 0% weightage.
• Nine firm offers and indicative prices were reported. Four were from Raipur and the rest from outside the state capital. Eight were taken for price calculation and given a weightage of 100%.
• SteelMint also received a single bid which didn’t qualify for price calculation of the Index.

Region-wise pellet offers and deals: