SteelMint: PELLEX remains stable while bids fall on sharp surge in coal prices

SteelMint’s bi-weekly domestic pellet (Fe 63%) index, PELLEX, stood at INR 10,850/tonne (t) DAP Raipur on 9 May, 2022, stable compared to the last assessment on 6 May. Around 15,000 t of pellet deals (Fe 63%) were concluded at INR 11,250/t DAP recently and taken for price calculation 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.
• One deal of around 15,000 t was reported after adjustment taken into consideration in this publishing window, hence, it was accorded 50% weightage for T1 trade.
• Seven (11) firm offers, bids and indicative prices were reported. All were taken for price calculation and were given 50% weightage.
• SteelMint received three bids at around INR 10,150/t DAP Raipur, and all were considered for calculation of the index.

Raipur-based pellet-makers Godawari kept offers stable at INR 11,100/t exw ($144/t). Other pellet-makers in Raipur kept offers at INR 10,600-10,800/t ($ 137-140/t) exw for Fe 62/63% grade pellets.

No offers from Jharsuguda were heard today; however, producers were offering earlier at around INR 10,200/t exw.

Buyers are showing interest but are expecting some more reduction in pellet offers in the near term. As per sources, disparities in bids and offers narrowed down and limited deals fot concluded but some bulk deals are expected in the coming days.

However, a few buyers expect more correction of around INR 400-500/t in Raipur pellet offers given the steep rise in bid prices at the recently conducted MCL coal auction, impacting the margins of sponge iron players.

Pellet-based DRI (P-DRI, FeM 80%) prices in Raipur stood at INR 34,800/t exw, down by around INR 500/t w-o-w. On a daily basis, sponge iron prices decreased by around INR 400/t.

Indian pellet market overview:

Domestic pellet prices almost stable across the key pellet-making regions except in eastern parts of India .

• Bellary iron ore pellet (Fe 63%) prices remain stable at INR 10,450/t. Confirmed deals for 2,000 t were recorded in this publishing window at around INR 10,400-10,500/t exw.
• Durgapur pellet offers also down by around INR 300/t to INR 9,700/t exw.
  Region-wise pellet offers and deals:

Region-wise pellet offers and deals: