SteelMint: PELLEX stable but trades muted on falling sponge iron prices

SteelMint’s bi-weekly domestic pellets (Fe 63%) index, PELLEX, stood at INR 7,600/tonne (t), stable compared to the last assessment on 15 November, 2022. Trades remained muted on continuous bid-offer disparities and the sharp drop in sponge iron prices.

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 was reported hence not considered in this publishing window and accorded 0% weightage for T1 trade.
• Nine (9) firm offers, bids and indicative prices were reported. Seven (7) were taken for price calculation and given the balance 100% weightage.
• SteelMintreceived two bids in the range of INR 7,300-7,350/t DAP but only one was taken for calculation in this publishing window.

Godawari Power and Ispat Ltd. has kept offers stable. Offers for pellets (Fe 63.5%, +/-0.5) stand at INR 7,900/t exw ($97/t). Other Raipur-based pellets producers are also offering at INR 7,500-7,600/t ($93-94/t) exw. No deals were recorded by SteelMint recently.

The gap between offers and bids is still the same for buyers as they looking for more clarity from the market. Amidst falling sponge and billet prices, India’s leading merchant miner , NMDC, has slashed iron ore prices for November deliveries. Lump ore prices have been reduced by INR 300-360/t and fines by INR 300/t from the company’s Chhattisgarh mines, effective from 17 Nov.

Odisha Mining Corporation (OMC) conducted an iron ore auction (0.75 mnt of fines and 0.65 mnt of lumps) on 16 November. According to market sources, nearly 16,000 t of fines was booked at the base price, while the remaining lots were left unsold. At OMC’s iron ore lump auction bid prices fell by up to INR 850/t compared to last month’s auction.

SteelMint’s price assessment for sponge P-DRI (FeM 80%) in Raipur moved down sharply by INR 2,450/t to INR 27,400/t w-o-w as against INR 29,850/t exw a week back. Sponge iron prices fell by INR 500/t d-o-d as against INR 27,900/t exw on 17 November.

Region-wise pellets offers and deals: