SteelMint: PELLEX down further by INR 100/t on lower bids

SteelMint’s bi-weekly domestic pellet (Fe 63%) index, PELLEX, stood at INR 7,900/tonne (t) DAP Raipur on 14 June 2022, down by around INR 100/t compared to the last assessment on 10 June. Around 8,000-10,000 t pellet (Fe 63) deals were heard in this publishing window at INR 8,400/t DAP Raipur.

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.
• One deal was reported for 9,000 t but not taken into consideration in this publishing window and hence accorded 0% weightage for T1 trade.
• Ten (10) firm offers, bids and indicative prices were reported. Around eight (08) were taken for price calculation and given 100% weightage.
• SteelMint received two bids at around INR 7,150/t and INR 7,650/t DAP Raipur, and only one was considered for calculation of the index.

Raipur-based pellet makers kept the offers stable at INR 8,000- 8,300/t exw ($103-107/t). However, one of the major pellet makers offered Fe 62/63% pellets at INR 7,800-8,000/t ($100-103/t).

A Jharsuguda-based pellet maker kept offers stable at INR 7,200/t exw compared to its last offer.

On the other hand, State-run Odisha Mining Corporation (OMC) has postponed its auction and it may, most likely, revise base prices and quantities for the auction. Earlier,  over 2.5 mnt of iron ore fines and lumps were scheduled for sale in the auction on 17 June.  The miner had decreased the base price for fines by up to INR 800/t and that for lump by up to INR 1,500/t as against the last auction’s base price.

Buyers are still showing lack of interest in buying pellets at these prevailing rates. There is disparity between bids and offers by around INR 300-400/t. As per market participants, the market may fall further owing to sluggish demand and weak sentiments.

Pellet-based DRI (P-DRI, FeM 80%) prices in Raipur stood at INR 30,600/t exw, down INR 400/t w-o-w.  On a daily basis, sponge iron prices also decreased by around INR 200/t.

Indian pellets market overview:

Pellet-making regions across India showed a downwards trend owing to low buying interest.

• Iron ore pellet (Fe 63%) prices in Bellary inched down to INR 8,500/t exw today as against INR 8,900/t on 10 June, as per SteelMint’s assessment.
• Pellet (Fe 63%) prices in Durgapur decreased by INR 100/t today to INR 6,900/t exw compared to the last assessment of INR 7,000/t on 10 June.

Regional offers and pellet deals: