SteelMint: PELLEX stays stable despite cheaper deals from neighbouring markets

SteelMint’s bi-weekly domestic pellet (Fe 63%) index, PELLEX, remains stable at INR 11,100/t DAP Raipur on 21 Sep’21. A few deals by Raipur- and Odisha-based players were recorded by SteelMint during this assessment period.

Raipur-based pellet players kept offers stable at INR 11,400-11,700/t exw for this week. However, hardly any buying interest was observed at these levels after deals getting concluded from West Bengal and Jharsuguda at INR 11,000/t DAP and INR 11,300/t DAP Raipur recently.

Jharsuguda- based producers have decreased their offers by INR 200/t to INR 10,500/t exw against the last offer at INR 10,700/t exw.

As per sources, a few central India-based players are evaluating options about booking South African iron ore lumps cargoes as global iron ore prices have fallen drastically.

With the decline in global iron ore prices, iron ore lump import offers from South Africa have decreased resulting in some bookings by Indian mills recently.

On the other hand, a major pellet producer in Raipur has undertaken maintenance shutdown for the next week, while another producer is not offering in the market today as it is already booked for enough quantities to dispatch.

SteelMint’s daily assessment for Raipur sponge P-DRI stands at INR 30,600/t exw, up INR 100/t. Prices hit the highest level in a month due to slight supply shortage and rise in billet offers by INR 550/t, d-o-d. On a weekly basis, prices have moved up by INR 800/t.

Indian pellet market overview:

Indian pellet prices have been down around INR 100-500/t across regions. However, in a few region prices were stable.

Barbil pellet prices have fallen further this week. SteelMint’s assessment for iron ore pellet (Fe 63%) stands at INR 10,000/t loaded on to wagon, down INR 100/t compared to the last assessment of INR 10,100/t on 17 Sep.

Bellary iron ore pellet (Fe 63%) prices dropped to INR 11,300/t against INR 11,500/t on 17 Sep.

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 totalling around 8,500 t but only one deal was considered in this publishing window as T1 for index calculation, being given 50% weightage. An Odisha-based pellet maker sold around 6,500 t of pellets to Raipur at INR 11,300/t on FOR Raipur basis today. Last week, a sponge maker from Raipur and Bilaspur booked pellets from West Bengal at INR 11,000/t FOR Raipur.
• Nine (09) firm offers and indicative prices were reported. Four were from Raipur and the rest from outside the state capital. Three (03) were taken for price calculation and given a weightage of 50%.
• SteelMint received three bids and all were considered for calculation of the index.

Region-wise pellet offers and deals: