SteelMint: PELLEX down by INR 100/t on lower bids, fall in sponge prices

SteelMint’s bi-weekly domestic pellet (Fe 63%) index, PELLEX, stood at INR 11,100/tonne (t) DAP Raipur on 3 May, 2022, down compared to the last assessment on 29 April. Around 10,000 t of pellet deal (Fe 62/63) were concluded at INR 10,950/t DAP recently and taken for price calculation 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 of around 10,000 t was reported after adjustment taken into consideration in this publishing window, hence, it was accorded 50% weightage for T1 trade.
• Thirteen (13) firm offers, bids and indicative prices were reported. Eleven (11) were taken for price calculation and were given 50% weightage.
• SteelMint received two bids, and only one was considered for calculation of the index.

Raipur-based pellet makers kept offers stable at INR 11,500/t exw ($150/t). Other pellet makers in Raipur kept offers at INR 11,000-11,200/t exw for Fe 62/63% grade pellets.

Jharsuguda-pellet offers are heard at around INR 10,000-10,300/t exw.

As the much-awaited price revison from India’s largest iron ore miner NMDC released towards the end of last week, they kept the iron ore prices unchanged for May 2022 deliveries.

Buyers are still showing low interest for pellets under volatile sponge iron prices. As per sources, there are some disparities in bids and offers, but a few deals are expected to be confirmed. Some buyers expect a marginal correction of INR 200-300/t for Raipur pellet offers in the near term.

Pellet-based DRI (P-DRI, FeM 80%) prices in Raipur stood at INR 35,300/t exw, down further by around INR 500/t w-o-w. On a daily basis, sponge iron prices decreased by around INR 400/t .

Indian pellet market overview: Domestic pellet prices fell in most of the key pellet making regions except Bellary where the price increased sharply this week.

• Iron ore pellet (Fe 63%) prices in Bellary, Karnataka, increased by around INR 700/t to INR 10,700/t exw today, as per SteelMint assessment. Shortage and losses in the pellet market led to rise in prices this week.

Region-wise pellet offers and deals: