SteelMint: PELLEX falls around INR 350/t on weak demand

SteelMint’s bi-weekly domestic pellet (Fe 63%) index, PELLEX, stood at INR 10,500/tonne (t) DAP Raipur on 13 May 2022, down around INR 350/t compared to the last assessment on 10 May. One deal was reported for 5,000 t which was done 4-5 days back but not considered in this publishing window as it was not falling under SteelMint methodology.

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 5,000 t was reported but not taken into consideration in this publishing window, hence, it was accorded 0% weightage for T1 trade.
• Fourteen (14) firm offers, bids and indicative prices were reported. Only eleven (11) were taken for price calculation and were given 100% weightage.
• SteelMint received three bids at around INR 9,650- 10,150/t DAP Raipur, and two were considered for calculation of the index.

Raipur-based pellet-maker Godawari kept offers stable at INR 11,100/t exw ($144/t). Other pellet-makers in Raipur kept offers at INR 10,700-10,800/t ($137-140/t) exw for Fe 63% grade pellets.

Jharsuguda producers also heard cut pellet offers at around INR 9,500-9,800/t exw.

Buyers are eagerly waiting for the next price cut from pellet makers. Domestic steel billet and sponge prices dropped on lower bids and weak demand on account of limited enquiries for finished steel products. Falling sponge, billet and finished prices led to bearish market sentiments.

Also State PSU miner OMC has scheduled an iron ore auction for 19 May, 2022. Around 971,000 t of lump ore and 1.285 mnt of fines will be put up for auction. The base price of the auction is yet to be disclosed.

Pellet-based DRI (P-DRI, FeM 80%) prices in Raipur stood at INR 34,700/t exw, down by around INR 300/t w-o-w. However, on a daily basis, sponge iron prices increased by around INR 100/t.

Indian pellets market overview:

Domestic pellet prices down across key pellet-making regions except Kandla.

• Iron ore pellet (Fe 63%) prices in Bellary dropped to INR 10,200/t exw today as against INR 10,450/t on 10 May, as per SteelMint assessment. However, no deals have been reported in this current publishing window.
• Pellet (Fe 63%) prices in Durgapur decreased today to INR 9,350/t exw, down INR 350/t compared to the last assessment of INR 9,700/t on 10 May. Also, deals of around 5,000 t were concluded by a Durgapur-based player at INR 9,300/t exw during the present assessment period.

Region-wise pellet offers and deals: