SteelMint: PELLEX falls by INR 400/t in absence of trade

SteelMint’s bi-weekly domestic pellet (Fe 63%) index, PELLEX, stands at INR 12,250/tonne (t) DAP Raipur on 11 Feb’22, down by INR 400/t against the last assessment on 8 Feb. No confirmed trade was heard in this publishing window.

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 taken into consideration in this publishing window, and accorded no weightage.
• Nine (09) firm offers, bids and indicative prices were reported. Seven (07) were taken for price calculation and given 100% weightage.
• SteelMint received two bids but not qualified for the index calculation.

Raipur pellet-makers have kept their offers stable at INR 12,500-12,600/t exw. However, it may be noted that a few central India-based pellet plants are under maintenance for a week or more and one of the major sellers has less material to offer. Also, the rise in pellet export prices is another factor which has prevented pellet-makers from lowering offers.

A Jharsuguda, Odisha-based pellet producer is also not offering in the market due to being under maintenance shut down which will last for a few more days.

A couple of sponge players while talking to SteelMint revealed that they have sufficient stock therefore are not in hurry to conclude any pellet deal at the prevailing high offers. Meanwhile, most of them are preferring NMDC’s DR CLO and lumps.

High coal offers at ports and fall in sponge prices were the other factors resulting in weak demand in the merchant market.

Portside South African coal prices continued to remain range-bound owing to limited ready stock at ports. Traders were heard offering RB2 (5500 NAR) grade coal in the range of INR 15,800-16,000/t this week at Gangavaram Port, up by INR 400-600/t w-o-w.

Pellet-based DRI (P-DRI, FeM 80%) prices in Raipur have dropped by INR 1,100-1,200/t w-o-w to INR 33,650/t exw compared to last week’s offers. On a daily basis, prices have come down by INR 350/t.

Indian pellet market overview: Domestic pellet prices remained stable today across the pellet making regions except Bellary owing to a fall in sponge prices there.

Iron ore pellet (Fe 63%) prices in Bellary decreased to INR 10,250/t exw today against INR 11,050/t on 8 Feb, as per SteelMint’s assessment. Lower bids amidst decline in P-DRI prices have weighed down pellet offers.

Region-wise pellet offers and deals: