SteelMint: PELLEX falls marginally on muted trades, drop in sponge iron prices

SteelMint’s bi-weekly domestic pellet (Fe 63%) index, PELLEX, stood at INR 13,900/tonne (t) DAP Raipur on 22 Mar’22, down INR 100/t compared with the last assessment on 17 March. Limited deals were heard in this publishing window.

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.
• One deal was reported and taken into consideration in this publishing window; likewise, accorded 50% weightage.
• Seven (08) firm offers, bids and indicative prices were reported. Five (05) were taken for price calculation and given 50% weightage.
• SteelMint has also received two bids which were considered for calculating the index.

Raipur-based pellets producers kept offers stable at INR 14,500/t exw for Fe 63% (+/- 0.5%). However, SteelMint heard a few offers at INR 14,000/t exw. Jharsuguda-based pellet makers resumed offering in the domestic market at INR 13,700/t exw.

Buyers are anxious and confused while looking at the present market scenario. They are holding buying decisions owing to high coal and other raw material prices. The disparity between offers and bids still prevails.

As per sources, major buyers either have pellet stocks for the next few weeks or are using NMDC lump ore.

Amid decreasing South African thermal coal prices for Apr’22, portside offers of RB2 (NAR 5500 kcal/kg) coal prices remained firm at INR 20,000-21,000/t at Gangavaram Port. This came against the backdrop of reduced availability of coal at ports.

Pellets-based DRI (P-DRI, FeM 80%) prices in Raipur decreased by INR 900/t to INR 42,000/t exw today on a daily basis.

Indian pellets market overview: Domestic pellets prices largely stable in the pellet making regions except Durgapur.

• Iron ore pellet (Fe 63%) prices in Bellary inched down to INR 11,000/t exw today against INR 11,050/t on 17 Mar, as per SteelMint’s assessment.
  Deals for 11,000 t were confirmed in this publishing window at around INR 10,800-11,000/t exw.
• Durgapur pellet offers are heard to have decreased futher to INR 12,900/t exw, down by around INR 100/t.

Region-wise pellets offers and deals: