SteelMint: PELLEX falls INR 150/t on competitive offers from eastern India

SteelMint’s bi-weekly domestic pellet (Fe 63%) index, PELLEX, stood at INR 8,600/tonne (t) DAP Raipur on 31 May 2022, down by around INR 150/t compared to the last assessment on 27 May. The competitive deals concluded in Raipur from outside the state (Odisha) led to the price fall. Around 26,000 t of deals were concluded in the last few days.

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.
• Around 25,000 t of deals were reported and hence were taken into consideration in this publishing window and accorded 50% weightage for T1 trade.
• Eight(08) firm offers, bids and indicative prices were reported. Only five (05) were taken for price calculation and given 50% weightage.
• SteelMint received two bids at around INR 8,500/t DAP Raipur, and considered for the calculation of the index.

Raipur players have continued to hold offers. Godawari Power and Ispat Ltd’s (GPIL’s) was at INR 10,300/t exw ($133/t) and other Raipur-based pellet producers kept their offers stable at INR 9,900-10,000/t ($127-129/t) exw. However, one of the major pellet makers offered at INR 8,500/t ($109/t).

Buyers are mostly exploring options outside the state for reasonable pellet deals. Hence, they have concluded decent deals at INR 8,250-8,450/t DAP Raipur in the past few days, as per sources. Market particpants are still expecting a sharp correction in pellet offers in the days to come.

Pellet-based DRI (P-DRI, FeM 80%) prices in Raipur stood at INR 31,400/t exw, down INR 1,600/t w-o-w. On a daily basis, sponge iron prices decreased by around INR 300/t.

Indian pellets market overview:

Market participants are still under pressure. Hence, they kept the offers stable in most of the pellet-making regions except Jharsuguda and Barbil where prices have seen a drop of INR 700-1,100/t exw recenlty.

Iron ore pellet (Fe 63%) prices in Bellary, Karnataka remained range-bound at INR 9,300/t exw today, as per SteelMint’s assessment. Deals for 8,000 t were confirmed in this publishing window at around INR 9,100-9,300/t exw.

Region offers and pellet deal: