SteelMint’s bi-weekly domestic pellet index “PELLEX” was stable on Friday (07th Aug’20) at INR 7,200/t DAP amid lack of trades and tight supply in the Raipur market.
Some pellet makers from areas near Raipur have taken maintenance shutdowns. A major pellet maker in Raipur is planning to take a maintenance shutdown sometime next week.
Yesterday, an Odisha based major iron ore miner increased offer for both fines and lumps by INR 150-300/t each amid an acute shortage of raw material in Odisha.
Few Raipur based buyers are interested in booking pellets at current offers given the volatility in ferrous markets.
PELLEX has been derived using five data points: i.e trades, offers, bids, substitute parity, and export realizations. You can download the detailed methodology by clicking on this link Click here
Assigning weightage to data points:
- One transaction of 1,000 t was reported at INR 7,250/t (DAP, Raipur) two days back by a Raipur based pellet buyer. This transaction was given a 66.7% weightage in the index.
- Four firm offers were reported this week at INR 7,350-7,450/t (DAP, Raipur) and the rest three from outside Raipur at INR 7,800-8,000/t (DAP, Raipur) which have been given a weightage of 16.7%.
- No firm bids were reported in this publishing window.
- SteelMint calculated the price at which Raipur pellet can displace NMDC lump in the sponge rotary kiln feed (substitute parity) on a DAP Raipur basis at INR 6,400/t and given a weightage of 16.7%.
- The export realization factor has not been considered as pellet makers are less active in exports owing to an increase in domestic demand.
Calculation of Index:
Source-: SteelMint
Region-wise pellet deals and offers:
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