PELLEX Down by INR 100/WMT on Less Trades & Falling Lump Offers

PELLEX moved down further by INR 100/WMT to INR 5,950/wmt (DAP Raipur) amid limited trades and fall in lump prices in NMDC and Odisha. Two deals were reported in this publishing window from Durg and Raipur for around 5,000-6,000 MT at INR 5950/MT (DAP Raipur).

Raipur based pellet maker kept pellet offers stable at INR 6,000/MT( Ex-plant); normalizing for freight to Raipur at INR 6,150/MT (DAP Raipur).

Five bids were reported at INR 5,650-5,950/MT (DAP Raipur). No export deals were reported in this publishing window.

Pellet export indications stand at around USD 92-93/MT, FoB India for Fe 64% (3% Alumina) with no fresh deals being reported. In Central India the export market is illiquid; therefore export realization factor has been ignored in the computation of PELLEX.

Odisha based Serajuddin mines has decreased lumps prices by INR 300/MT to INR 3,400/MT (Ex-mine) today on 24th Sept 2019. Last week NMDC has declined iron ore fines and lump fines by INR 200/MT in both lumps and fines and DRCLO by INR 230/MT.

Why PELLEX? India has installed pellet capaci1ty of 85 MnT pa and an annual production of around 65-66 MnT. 5 major states – Odisha (28.9 MnT), Karnataka (19.5 MnT), Chhattisgarh (9.6 MnT), Jharkhand (8.4 MnT) and Andhra Pradesh (8 MnT) – covers around 85-90% of the capacity. Based on the above we have chosen Raipur as our index base as this market seems more active from a domestic merchant trading perspective along with exports. Also, Chhattisgarh has a good base for sponge iron makers (DRI) who procure a decent amount of pellets.

These factors have led SteelMint to launch this index of PELLET on DAP Raipur basis.
The proposed specifications, along with delivery terms were devised following consultation with market participants. They are as follows:
1. Fe Content – Fe 63-64%
2. Combined Silica & Alumina – 7%
3. Trade Size – 2,500-10,000 MT
4. Payment terms – Advance

SteelMint will continue to monitor changes in the pellet markets and will adjust its methodology in accordance with the market participants.

To provide feedback/suggestions, please contact info@steelmint.com 

Click here to see SteelMint Pricing Methodology and Rationale documents.