SteelMint: PELLEX falls by INR 500/t on lower offers, drop in sponge prices

SteelMint’s bi-weekly domestic pellet (Fe 63%) index, PELLEX, stood at INR 11,600/tonne (t) DAP Raipur on 22 April 2022, down INR 500/t compared with the last assessment on 19 April. No deal has been heard so far in this publishing window. Few offers near by Raipur city kept prices competitive.

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, hence, accorded 0% weightage for T1 trade.
• Eleven (11) firm offers, bids and indicative prices were reported. Seven (07) were taken for price calculation and given 100% weightage.
• SteelMint received two bids and only one is considered for calculation of the index.

Two Raipur-based pellet players have cut offers by INR 500/t to INR 11,500/t exw. However, others have kept offers stable at INR 12,000-12,300/t exw ($157-161/t) till the time of publishing this article. However, they are likely to follow the suit.

Jharsuguda-based producers also lowered offers to INR 10,600/t exw. However, no major deal was concluded so far in this publishing window, except a few concluded in the local market.

The gap between offers and bids has narrowed down but buying interest is still lower and further price cuts are expected.

Pellet-based DRI (P-DRI, FeM 80%) prices in Raipur stood at INR 37,300/t exw, down by around INR 500/t d-o-d. On a weekly basis too, sponge iron prices decreased by around INR by 200/t.

Indian pellets market overview: Domestic pellet prices decreased across key regions.  However, prices in Kandla and Bellary remained stable.

• Iron ore pellet (Fe 63%) prices in Bellary, Karnataka remained range-bound at INR 10,200/t exw today, as per SteelMint assessment. Deals for 10,000 t were confirmed in this publishing window at around INR 10,100-10,300/t exw. Drop in sponge prices may result in lowering of pellet offers in the near term.
• Pellet (Fe 63%) prices in Durgapur decreased to INR 10,400/t exw, down INR 350/t compared to the last assessment of INR 10,750/t on 19 Apr’22.

Region-wise pellet offers and deals: