SteelMint’s bi-weekly domestic pellet (Fe 63%) index, PELLEX, stood at INR 8,200/tonne (t) DAP Raipur on 7 June 2022, down by around INR 300/t compared to the last assessment on 3 June. On Tuesday, PELLEX was assessed at it lowest since August 2020. Pellet makers in Raipur cut offers sharply, twice in the last two days by a total of around INR 1,900-2,000/t. Last week, SteelMint had forecasted a sharp price cut in pellets as demand had almost dried up.
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 for 5,000 t but not taken into consideration in this publishing window on further revision in offers and hence accorded 0% weightage for T1 trade.
- Thirteen (13) firm offers, bids and indicative prices were reported. Only nine (09) were taken for price calculation and given 100% weightage.
- SteelMint received three bids at around INR 7,150-8,050/t DAP Raipur, and considered only two for the calculation of the index.
Godawari Power and Ispat Ltd (GPIL) decreased pellet offers further today for domestic buyers by INR 500/t ($6.50/t) to INR 8,300/t exw ($107/t) from INR 8,800/t ($113/t) yesterday. However, one of the major pellet makers also dropped offers for Fe62.5% pellets to INR 8,000/t ($103/t).
A Jharsuguda-based pellet maker also dropped its pellet offers to INR 7,500-7,800/t exw compared to its last offer.
Meanwhile, NMDC has slashed prices of lump ore by up to INR 1,320/t and fines by INR 1,100/t, effective from 5 June. This is about 20-25% lower from the last price announcement which was made on 25 May 2022.
SteelMint also learned from market participants that Raipur-based buyers have concluded deals for iron ore lumps from a Chandrapur, Maharashtra-based miner. This has allowed buyers to get an edge over other pellet makers in Raipur in terms of further price negotiations.
Pellet-based DRI (P-DRI, FeM 80%) prices in Raipur stood at INR 31,000/t exw, down INR 400/t w-o-w. On a daily basis, sponge iron prices decreased by around INR 100/t.
Indian pellets market overview:
Other pellet-making regions across the country cut pellet offers further this week. However, demand is still weak and the market sluggish. Buyers are not keen to take buying decisions.
- Pellet prices in Odisha’s Barbil decreased sharply throughout this week, as per SteelMint reports. The current assessment of iron ore pellets (Fe 63%) in Barbil, Odisha stands at INR 7,250/t loaded on to wagon, down by INR 750/t against 3 June 2022.
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Iron ore pellet (Fe 63%) prices in Bellary inched down to INR 8,900/t exw today as against INR 9,100/t on 3 June, as per SteelMint’s assessment. Confirmed deals of 2,000 t, at around INR 9,000/t exw, were recorded in this publishing window.
Regional offers and pellet deals:
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