SteelMint: PELLEX down by INR 200/t on price cuts, absence of trade

SteelMint’s bi-weekly domestic pellets (Fe 63%) index, PELLEX, stood at INR 7,600/tonne (t), down by INR 200/t compared to the last assessment on 11 November, 2022. Trades continued to remain muted on bid-offer disparities and the drop in sponge iron prices.

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.
• No deal was reported hence not considered in this publishing window and accorded 0% weightage for T1 trade.
• Ten (10) firm offers, bids and indicative prices were reported. Seven (7) were taken for price calculation and given the balance 100% weightage.
• SteelMint has received three bids in the range of INR 7,300-7,350/t DAP but two bids were taken for calculation in this publishing window.

Godawari Power and Ispat Ltd has reduced domestic pellets (Fe 63.5%, +/-0.5) offers by INR 200/t ($2/t) to INR 7,900/t exw ($98/t) from INR 8,100/t exw ($100/t) on 31 October. Other Raipur-based pellets producers also reduced their offers by up to INR 7,500-7,600/t ($93-94/t) exw. No pellets deals were recorded by SteelMint recently.

Offers and bids gaps are getting narrowed down but still market participants are away from buying decision for pellets as they are still searching for more clarity from the market. Meanwhile, steelmakers  are procuring lumps from Chandrapur-based miners at a reasonable price against the prevailing pellets offers.

However, State-run Odisha Mining Corporation (OMC) has scheduled an auction for iron ore fines and lumps on 16 November, 2022 . Around 0.75 mnt of fines and 0.65 mnt of lumps will be put up for auction from OMC’s mines. The miner has increased the base price for fines by up to INR 350/t and that of lumps by up to INR 100/t against the last auction held on 19 October.

SteelMint’s price assessment for sponge P-DRI (FeM 80%) in Raipur moved down to INR 28,950/t w-o-w as against INR 30,100/t exw on 8 November. Sponge iron prices fell by INR 150/t d-o-d as against INR 29,100/t exw on 14 November.

Region-wise pellets offers and deals: