SteelMint: PELLEX stable even as bids fall on weakening sponge iron prices

SteelMint’s bi-weekly domestic pellet (Fe 63%) index, PELLEX, was stable at INR 13,800/t DAP Raipur on 22 Oct’21. Trade activity remained muted in this publishing window, though.

Central India-based pellet makers continued to keep their offers stable for the domestic market, sources informed SteelMint. Current offers for pellets (Fe 63%) stand at INR 13,700-14,000/t exw-Raipur.

Offers from sellers in Odisha’s Jharsuguda moved down by around INR 200/t to INR 13,300/t exw. However, Raigarh-based pellet makers continued to stay on the sidelines, as per reports.

Buyers are still not sure about the market as it has started falling for the last few days. Therefore, they have suspended purchase decisions before clarity about prices emerges. However, a buyer told SteelMint that a price cut could be expected in the coming days.

After rising sharply over the past one month, portside prices of South African (SA) RB2 (5500 NAR) grade coal across key ports have corrected by INR 2,500/t this week. This is in line with the dramatic correction in imported thermal coal prices seen in China.

P-DRI (FeM 80%) prices in Raipur fell by INR 500/t to INR 34,000/t exw today. Decline in billet prices by INR 950/t on a daily basis and persistent weak demand have put pressure on sponge iron. On a weekly basis, sponge prices moved down by INR 1,100/t.

Indian pellet market overview:

The Indian pellet market across key supply regions exhibited a mixed picture. At a few locations pellet makers were not offering material as they waited for clearer directions to emerge on the price front.

SteelMint Bellary iron ore pellet (Fe 63%) prices have dropped to INR 13,000/t as against INR 13,200-13,300/t assessed on 19 Oct’21.

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 and therefore not considered as T1 trade for calculation of the index –accorded nil weightage.
• Nine (9) firm offers and indicative prices were reported. Four were from Raipur and the rest from outside the state capital. Six were taken for the price calculation and given a weightage of 100%.
• SteelMint received one bid at INR 13,150/t exw, but it did not qualify for calculation of the index.

Region-wise pellet offers and deals: