SteelMint: PELLEX falls further by INR 350/t on drop in offers

SteelMint’s bi-weekly domestic pellet (Fe 63%) index, PELLEX, stood at INR 11,250/tonne (t) DAP Raipur on 26 April 2022, down further by INR 350/t compared with the last assessment on 22 April. No deal has been heard so far in this publishing window. Raipur pellet makers cut offers today by around INR 300-500/t and in the last one week, prices have decreased by INR 800 in two successive cuts.

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.
• Ten (10) firm offers, bids and indicative prices were reported. Nine (09) were taken for price calculation and given 100% weightage.
• SteelMint received two bids and only one is considered for calculation of the index.

Godawari Power and Ispat Ltd (GPIL) has decreased pellet offers for domestic buyers by INR 500/t ($7/t) to INR 11,500/t exw ($150/t) from INR 12,000/t ($157/t). Other pellet makers in India also cut offers to INR 11,000-11,200/t exw for Fe 62/63% grade pellets. Weak demand and decreasing sponge iron prices kept pellet offers under pressure, SteelMint notes.

Jharsuguda-based producers also cut offers to INR 10,000-10,600/t exw. A few deals were also concluded recently at these prices.

The gap between offers and bids narrowed down but it will be interesting to see whether buying inquiries will come at this level.

Pellet-based DRI (P-DRI, FeM 80%) prices in Raipur stood at INR 35,800/t exw, down by around INR 2,700/t w-o-w. On a dailly basis, sponge iron prices were stable.

Indian pellets market overview: Domestic pellet prices decreased across key regions except Kandla and Bellary.

• Iron ore pellet (Fe 63%) prices in Bellary, Karnataka remained range-bound at INR 10,200/t exw today, as per SteelMint assessment.
• Pellet (Fe 63%) prices in Durgapur decreased to INR 10,300/t exw, down INR 100/t compared to the last assessment of INR 10,400/t on 26 Apr’22.

Region-wise pellet offers and deals: