SteelMint: PELLEX falls marginally on weaker market sentiments

SteelMint’s bi-weekly domestic pellet index “PELLEX” moved down marginally today by INR 50/t to INR 12,300/t DAP Raipur. No pellet deal has been reported in this publishing window on limited buying interest at current offers. Raipur based pellet makers are holding their offers stable at around INR 12,450-12,750/t (DAP, Raipur). Pellet offers from Jharsuguda have also remained stable at 12,150/t (DAP Raipur).

However, owing to falling P-DRI prices, buying interest is lower by INR 300-400/t from the current prevailing pellet offers in Raipur. Pellet sponge (P-DRI) prices in Raipur have decreased by around INR 600/t w-o-w to INR 25,550/t ex-plant this week.

Odisha’s Essel Mining has cut iron ore lump prices by INR 400/t and that of fines by around INR 300-400/t today, credible sources reported to SteelMint. Notably, the miner has cut offers after a gap of eight months as its last price cut was seen in May’20.

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 deal has been concluded in this publishing window therefore it was not considered for price calculation and weightage given 0%.
• Four firm offers from Raipur players were reported this week and only three offers were taken for price calculation at INR 12,450/t (DAP, Raipur) and the rest four from outside Raipur but considered only three offers for price calculation at INR 12,150-12,300/t (DAP, Raipur) and given a weightage of 33.3%.
• One firm bid was reported in this publishing window at INR 11,950/t (DAP, Raipur) and considered for price calculation and given weightage 33.3%.
• 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 11,500/t and given a weightage of 0%.
• The export realization factor was considered for price calculation as one trades for export was reported in this publishing window. Hence, pellet export realization has been given a weightage of 33.3%.

Calculation of Index:

Source-: SteelMint

Region-wise pellet deals and offers: