SteelMint: PELLEX falls by INR 500/t in recent deals

SteelMint’s bi-weekly domestic pellet (Fe 63%) index, PELLEX, fell by another INR 500/t to INR 10,950/t DAP Raipur on 19 Nov’21. After the fall, the index has moved down to the lowest level in nearly one and a half months as similar price levels were last seen in end-Sept’21. A few deals were reported in this publishing window, with pellet makers in Raipur reducing prices.

Central India-based pellet makers have cut their offers today by around INR 600-700//t, sources informed SteelMint. Current offers stand at INR 11,000-11,300/t exw-Raipur. Sellers in Odisha’s Jharsuguda have kept their offers almost same as they are waiting for buyers’ response.

A few deals were heard from outside Raipur totalling around 20,000-25,000 t at INR 10,800-11,000/t DAP (after normalising grade adjustment as well as chemical specifications). Deals in Raipur were observed after a long gap on sluggish demand for pellets. However, buyers are still not showing interest and are expecting prices to edge lower than the prevailing levels in Raipur.

Buyers at large are still hoping for further reduction in offers. A decline in domestic iron ore prices is also a factor being considered by them.

SteelMint’s assessment for sponge iron, P-DRI (FeM 80%), in Raipur fell by INR 800/t, w-o-w, to INR 29,500/t exw. However, on a daily basis prices have increased marginally by around INR 100/t. Sponge iron offers increased in Raipur today, while spot trading remained limited amidst subdued bids.

Indian pellet market overview: Pellet markets across regions witnessed further steep drop in prices by around INR 250-1,000/t on falling sponge iron prices.

Iron ore pellet (Fe 63%) prices in Bellary have inched down to INR 10,900/t exw, lower by INR 400/t against the beginning of 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.
• Two deals were reported in this publishing window hence considered as T1 trade for calculation of the index; accorded 50% weightage.
• Nine (09) firm offers and indicative prices were reported. Six (06) were taken for price calculation and given 50% weightage.
• SteelMint received one bid which did not qualify for calculation of the index.

Region-wise pellet offers and deals: