SteelMint’s bi-weekly domestic pellet (Fe 63%) index, PELLEX, fell sharply by INR 1,100/t to INR 13,300/t DAP Raipur on 20 Aug’21. The index fell to a five-month low, with similar price levels last seen in end-Mar’21.
A Raipur-based pellet producer lowered offers by INR 1,500/t to INR 13,000/t exw. However, other players continued to hold offers at INR 14,000/t exw for Fe 63% grade material, SteelMint learnt from sources.
As per SteelMint analysis, competitive offers from Odisha and nearby locations have put Raipur pellet offers under pressure. Amid absence of export deals, pellet players have turned aggressive in the domestic market. SteelMint’s pellet export index (Fe 64%, 3% Al, FoB east coast) declined $8/t w-o-w, currently standing at $148/t. The index has fallen to the lowest level in over eight months, as per SteelMint data.
Sources informed that a Jajpur-based pellet producer was heard offering at INR 13,400-13,500/t FoR Raipur. Jharsuguda-based producers have lowered offers further by INR 500/t and are currently floating offers at around INR 13,000/t exw.
Sponge iron ore producers believe that pellet export (ex-plant) realisations are lower than prevailing domestic offers and, therefore, market participants are expecting a further price cut in the domestic market. Till such time they are either holding purchases or using old stocks.
SteelMint’s benchmark pellet sponge (P-DRI, FeM 80%) prices fell by INR 100/t, w-o-w, to INR 31,700/t exw-Raipur on 20 Aug. However, on a daily basis, P-DRI prices were down by INR 150/t. Prices softened on expectations of a further drop in offers on improving supply in the coming days.
Indian pellet market overview:
SteelMint assesses Bellary iron ore pellet (Fe 63%) prices at INR 12,300/t exw, lower by INR 200/t compared to the last assessment of INR 12,500/t on 17 Aug’21. Barbil-based pellet offers are stable at around INR 13,500/t (loaded on to wagon).
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.
- Two deals were reported in this publishing window but were not considered as T1 for index calculation, being given 0% weightage.
- Ten (10) firm offers and indicative prices were reported. Four were from Raipur and the rest from outside the state capital. Eight (08) were taken for price calculation and given a weightage of 100%.
- SteelMint received no bid today and, therefore, not considered for index calculation.
Outlook: Pellet offers in Raipur are expected remain under pressure as prices are falling sharply in the export market, while domestic trading remains on a low key with expectations of an impending price cut.
Region-wise pellet offers and deals:
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