SteelMint: PELLEX up by INR 800/t in recent deals backed by sponge price rally

SteelMint’s bi-weekly domestic pellet (Fe 63%) index, PELLEX, increased further by INR 800/t to INR 13,900/t DAP Raipur on 12 Oct’21. Around 25,000 t of confirmed deals have been concluded in the Raipur market in the last few days but only 10,000 t of deals were considered for calculation in the present publishing window.

Central India-based pellet makers have increased offers for the domestic market, sources informed SteelMint. Current offers for pellets (Fe 63%) stand at INR 13,700-14,000/t exw-Raipur, an increase of up to INR 700/t, w-o-w. Positive sentiments in the sponge iron market on the back of rising prices in the IF long steel market seem to have lifted offers.

Pellet makers from the nearby market also increased offers as some are undertaking maintenance shut down for the next few days. No firm offers from Jharsuguda were reported today.

P-DRI (FeM 80%) prices in Raipur rose INR 2,000/t to INR 35,300/t exw yesterday. Buyers were less interested on floated offers, even though sponge prices hit the highest since SteelMint started maintaining data in Jul’12.

On a weekly basis, prices have also moved up by INR 1,300/t.

Indian pellet market overview:

Indian pellet prices have moved up sharply across regions upto INR 1,050/t in this publishing period this week so far.

Bellary iron ore pellet (Fe 63%) prices have increased to INR 13,200-13,300/t as against INR 12,700-12,800/t exw assessed on 8 Oct’21. Confirmed deals of 9,000 t were recorded at around INR 13,000-13,500/t exw.

Jindal SAW has further increased pellet offers by INR 1,000/t ($14) yesterday. Current offer for Fe 63% pellet stands at INR 13,500/t DAP Kandla, SteelMint learnt from sources. Also, around 10,000 t pellet deal has been concluded at the increased offer.

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.
• Three deals were reported for around 25,000 t but two deals were considered as T1 trade and factored into calculation of the index, given 50% weightage.
• Nine (9) firm offers and indicative prices were reported. Four were from Raipur and the rest from outside the state capital. Four (4) were taken for the price calculation and given a weightage of 50%.
• SteelMint also received one bid at INR 13,150/t (DAP, Raipur) which was not considered for calculation of the index.

Region-wise pellet offers and deals: