SteelMint: PELLEX rises INR 500/t on recovery in sponge iron prices

SteelMint’s bi-weekly domestic pellet (Fe 63%) index, PELLEX, stood at INR 12,100/tonne (t) DAP Raipur on 19 Apr’22, up INR 500/t compared with the last assessment on 15 April.  A deal was heard concluded for 20,000 t 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.
• A deal for 20,000 t reported but taken into consideration in this publishing window . Hence accorded 50% weightage for T1 trade.
• Seven (07) firm offers, bids and indicative prices were reported. Six (06) were taken for price calculation and given 50% weightage.
• SteelMint received three bids and only two considered for calculation of the index.

Raipur, Chhattisgarh-based pellet producers kept their offers stable at INR 12,000-12,300/t exw ($157-162/t).

Jharsuguda-based producers increased offers to INR 11,200/t exw. However, no major deal was concluded in this publishing window.

Gaps between offers and bids narrowed down owing to hike in sponge iron offers and increased bids in the recent OMC iron ore auction. As per sources, some deals are expected to get concluded on current offers. OMC had scheduled an iron ore fines auction on 18 April in which out of a total of 0.95 mnt of material, the entire quantity received bids. The miner had decreased the base price for fines by up to INR 350/t and that for lump by up to INR 500/t as against the base price of last auction on 15 March.

Pellets-based DRI (P-DRI, FeM 80%) prices in Raipur stood at INR 38,500/t exw, up by around INR 3,000/t w-o-w. However, on a daily basis, sponge iron prices decreased by around INR by 300/t.

Indian pellets market overview: Domestic pellet prices increased sharply across pellet-making hubs except Kandla and Raipur.

• Pellet prices in Durgapur increased today, as per SteelMint assessment. The current assessment for pellet (Fe 63%) stands at around INR 10,700-10,800/t exw Durgapur, up INR 450/t compared to the last assessment of INR 10,300/t on 15 April. Also, deals of around 3,000 t were concluded by a Durgapur-based player at INR 10,700/t exw during the present assessment period.
• Meanwhile, the current assessment for iron ore pellets from the Barbil region (Fe 63%) stands at around INR 10,500-11,000/t, up INR 250/t against 15 April.

Region-wise pellet deals: