SteelMint: PELLEX down marginally by INR 100/t in absence of trades

SteelMint’s bi-weekly domestic pellet index “PELLEX” down marginally by INR 100/t to INR 11,950/t DAP Raipur. No deal has been reported in this publishing window.

Raipur based pellet makers had raised offers towards mid of this week by around INR 500/t. However, due to no trades getting concluded at increased offers, they slashed their offers by INR 200-500/t towards weekend. Pellet offers from Jharsuguda at 12,150/t (DAP Raipur).

Market sources have reported SteelMint that with hike in pellet export prices, a Raipur based pellet maker was reported exploring possibilities in export market.

Most of Raipur based units are still less interested to buy pellets at current offers and continue to prefer NMDC ore.

Pellet sponge (P-DRI) prices have remained largely stable on weekly basis at INR 26,200/t exw. However, on a daily basis, prices increased by INR 100/t.

Rationale – 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.

• No pellet deal has been concluded in this publishing window therefore it was not considered for price calculation and weightage given 0%.
• Three firm offers from Raipur players were reported this week and all offers were taken for price calculation at INR 12,150-12,450/t (DAP, Raipur) and the rest three from outside Raipur at INR 12,150-12,500/t (DAP, Raipur) and given a weightage of 50%.
• No firm bid was reported in this publishing window hence not considered for price calculation and given weightage 0%.
• 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 10,900/t and given a weightage of 0%.
• The export realization factor has been considered owing to increased offers. Hence, pellet export realization has been considered for price calculation and given a weightage of 50%.

Calculation of Index:

Source-: SteelMint

Region-wise pellet deals and offers: