SteelMint’s bi-weekly domestic pellet index, PELLEX, fell further by INR 150/t to INR 15,550/t DAP Raipur. Lower bids on falling steel margins and a stream of competitive offers to Raipur buyers from producers based outside the state capital continue to keep pellet offers under pressure, even as the market waits for NMDC’s price announcement for the month. No deal was reported in this publishing window.
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 also kept offers stable at INR 15,000/t exw.
Moreover, a few pellet makers from Raipur are planning to go for maintenance shutdown in the next few days. This could keep supplies tight, with already a few major pellet producers out of the domestic market, booked as they are for exports.
Jharsuguda-based pellet makers have also kept offers stable at INR 14,600-14,800/t exw. Subdued domestic finish steel sales and declining sponge iron prices have resulted in bids inching down.
Raipur-based furnaces have slashed production and some mills are also planning to take maintenance shutdown in the coming days. Hence demand for pellets is expected to remain thin.
Bids at OMC iron ore fines e-auction drop by up to INR 1,900/t ($25): State-owned miner Odisha Mining Corporation (OMC) had scheduled an iron ore fines e-auction on 8 Jul’21. The entire quantity of 1.06 million tonnes (mn t) put to auction got booked. Bids dropped by INR 1,100-1,950/t compared to bids received at OMC’s May auction.
Less aggressive participation was due to a drop in pellet and sponge iron ore prices which led steel plants to cut production. A few major buyers at the previous e-auction, such as Brahmani River Pellets Limited (BRPL) and Atibir Industries, did not participate in the latest auction, as per SteelMint reports.
P-DRI prices in Raipur have moved down further by INR 400/t w-o-w to INR 28,700/t exw, against last week’s price of INR 29,100/t.
Indian pellet market overview-: Indian pellet prices across regions remained stable during the period under review. SteelMint’s assessment for Bellary iron ore pellet (Fe 63%) currently stands at INR 12,000/t, stable against the previous assessment made on 6 Jul. Bellary pellet prices are hovering at three-month lows, as per SteelMint records.
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 was reported in this publishing window that could have been considered as T1 for index calculation and given a 0% weightage.
- Ten firm offers and indicative prices were reported. Two 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 two bids at INR 13,000-13,500/t exw-Raipur which did not qualify for price calculation of the Index.
Region-wise pellet deals and offers:
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