SteelMint: PELLEX down INR 200/t on bearish steel market sentiments

SteelMint’s bi-weekly domestic pellet index, PELLEX, moved down by INR 200/t this week to INR 16,000/t, DAP Raipur. No deal was reported in this publishing window. The market is still silent with hardly any inquiries for pellet, as per trader sources, given falling steel margins.

As per market sources, southern India-based pellet producers are exploring the Raipur market as prices are competitive. SteelMint’s current assessment for pellet (Fe 63%) stands at INR 13,000-13,100/t, exw-Bellary, lower by a further INR 300/t against last week’s offer assessed on 18 Jun’21.

Raipur-based pellet producers have kept offers unchanged, with current offers for Fe 62.5%/63% pellet standing at INR 15,500-16,000/t, exw. Jharsuguda-based pellet producers have decreased offers by INR 200-300/t.

A majority of buyers are showing little interest in taking purchase decisions owing to the gap in bids and offers.

“Liquidity crunch (owing to low confidence and broken payment cycle), labour issues at sites and the onset of monsoon have led to the fall in demand in the market”, highlighted a sponge iron manufacturer.

P-DRI sponge prices in Raipur moved down by INR 300/t w-o-w to INR 30,500/t, exw, against last week’s price at INR 30,800/t. On a daily basis, prices went down by around INR 200/t today.

Indian pellet market overview-: Indian pellet prices across eastern and southern India have fallen further by INR 100-500/t today.

Western India-based Jindal SAW has kept offers stable this week.

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 has been reported in this publishing window and hence not considered T1 for index calculation and kept 0% weightage.
• Five firm offers and indicative prices were reported. Two were from Raipur and the rest from outside the state capital. All the offers were taken for price calculation and given a weightage of 100%.
• SteelMint also received a bid but it did not qualify for calculation of the Index.

Region-wise pellet offers and deals: