SteelMint: PELLEX declines marginally in absence of trade

SteelMint’s bi-weekly domestic pellet (Fe 63%) index, PELLEX, fell marginally to INR 14,450/tonne (t) DAP Raipur on 13 Aug’21. No deal was heard in this publishing window too. Current offers from Raipur-based pellet producers were stable at INR 14,200-14,500/t exw for Fe 63% grade, SteelMint learnt from sources.

Raigarh-based producers have lowered offers by INR 500-800/t and are currently offering at around INR 13,500-14,000/t exw. Deals are also heard to be concluded at even lower offers than the above-mentioned range. However, offers from Jharsuguda remained stable.

Declining pellet export realisations may result in weakening of domestic offers in the upcoming days, said market participants. SteelMint’s pellet export index (Fe 64%, 3% Al, FoB east coast) recorded a drop of $27/t w-o-w to $156/t on 11 Aug’21.

SteelMint’s benchmark pellet sponge (P-DRI, FeM 80%) prices rose by INR 800/t w-o-w to INR 31,800/t exw, Raipur on 13 Aug. However, on a daily basis, P-DRI prices were stable.

Indian pellet market overview:

SteelMint’s assessment for Bellary iron ore pellets (Fe 63%) stands at INR 12,500-12,600/t exw, down compared to the last assessment on 10 Aug’21 at INR 12,850/t. Active transactions of over 50,000 t have been reported in this publishing window.

Rationale:

• PELLEX has been derived using data points: i.e., trade, offers and bids. You can download the detailed methodology by clicking on this link Click here.
• No deal was reported in this publishing window and hence not considered as T1 for index calculation, being given 0% weightage.
• Nine (09) firm offers and indicative prices were reported. Four were from Raipur and the rest from outside the state capital. Five were taken for price calculation and given a weightage of 100%.
• SteelMint received no bids today. Therefore, no weightage has been taken for the calculation of the index.

Outlook: Pellet prices are most likely to come under pressure following sluggish domestic trade and falling export realisations. Most of the export bookings were scheduled for Jul or Aug’21. Perhaps, market participants will try to push more volumes into the domestic market in Aug on falling global prices.

Region-wise pellet offers and deals: