SteelMint: PELLEX up further by INR 300/t in recent deals

SteelMint’s bi-weekly domestic pellet (Fe 63%) index, PELLEX, stood at INR 8,800/tonne (t) DAP Raipur on 12 July 2022, up by around INR 300/t compared to the last assessment on 8 July. Around 26,500 t of pellet (Fe 62/Fe63%) deals were reported at around INR 8,650-8,950/t DAP Raipur and all were taken into consideration in this publishing window. Amidst a hike in sponge iron prices, tightening of iron ore supplies amidst monsoons and lower raw material inventories, sponge iron producers remained active in securing pellet supplies.

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.
• Two deals totalling 26,500 t were reported and both were taken into consideration in this publishing window and hence accorded 50% weightage for T1 trade.
• Seven (07) firm offers, bids and indicative prices were reported. Around five (05) were taken for price calculation and given 50% weightage.
• SteelMint received one bids at around INR 8,150 but not considered for calculation of the index.

As per sources, pellet demand in the market getting improved as the rainy season approaches. Most of the buyers are preferring pellets.

India’s largest merchant iron ore mining company NMDC has slashed prices of lump ore by up to INR 600/t and fines by INR 500/t, effective from 12 July, SteelMint learnt from credible sources. This is about 11-15% from the last price announcement which was made in June. However, this has not made any impact so far in the pellet market.

Pellet-based DRI (P-DRI, FeM 80%) prices in Raipur rose by INR 2,500/t w-o-w to INR 35,800/t exw. On a daily basis, sponge iron prices increased by around INR 300/t. Prices remained strong on seasonal short supply and continued active demand on rising billet prices.

Indian pellets market overview:

• Current assessment for Odisha’s Barbil iron ore pellets (Fe 63%) increased at INR 7,500/t loaded on to wagon.
• Iron ore pellet (Fe 63%) prices in Bellary moved up further to INR 10,000/t exw today as against INR 9,800/t on 8 July, as per SteelMint’s assessment. Prices have been climbing up since end-May.

Region-wise pellet offers and deals: