SteelMint’s bi-weekly domestic pellet (Fe 63%) index, PELLEX, continued to fall sharply from last week by INR 1,150/t to INR 12,150/t DAP Raipur on 24 Aug’21. Around 80,000 t of deals were recorded by SteelMint from 21-24 Aug’21. India’s domestic pellet market continues to witness downward pressure on aggressive domestic sales following falling export realisations.
Raipur pellet offers have edged down by INR 1,700-1,800/t w-o-w to INR 12,000-12,300/t exw.
Raigarh- and Jharsuguda-based producers have lowered offers by INR 1,000-1,500/t and are currently floating offers at around INR 12,000/t exw. A few bulk buyers are still holding purchase, reluctant to buy as they are expecting further price cuts in the next few days in anticipation of a reduction in iron ore offers by Odisha miners.
Sponge P-DRI (FeM 80%) prices remained stable in Raipur today at INR 30,200/t exw. However, on a weekly basis, P-DRI prices inched down by INR 1,200/t. Prices softened on expectations of a further drop in offers on improving supply in the coming days. However, there are indications that sponge iron prices will decline gradually due to softening pellet prices amid improved availability.
Indian pellet market overview:
Indian pellet prices declined by around INR 500-1,500/t across regions in the last few days on falling exports and domestic demand.
Steelmint’s current assessment for Barbil iron ore pellet (Fe 63%) stands at INR 12,000/t loaded on to wagon, down INR 1,500/t compared to the last assessment of INR 13,500/t on 20 Aug’21.
Bellary pellet offers have fallen amid falling P-DRI prices and decline in pellet offers in other regions. Confirmed deals of about 7,000 t of pellets were recorded at INR 12,000/t exw-Bellary.
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.
- Multiple deals were reported in this publishing window and considered as T1 for index calculation, being given 50% weightage.
- Eleven (11) firm offers and indicative prices were reported. Four were from Raipur and the rest from outside the state capital. Seven (07) were taken for price calculation and given a weightage of 50%.
- SteelMint received no bid today and, therefore, not considered for index calculation.
Outlook: Pellet offers in Raipur continue to remain under pressure on falling export realisations leading to increased supplies in the domestic market. India exports roughly 1 mn t of pellets per month with around 90% of exports to China alone which is reeling under steel production cuts.
Region-wise pellet offers and deals:
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