SteelMint: PELLEX stable on subdued trade, bids drop further

SteelMint’s bi-weekly domestic pellet (Fe 63%) index, PELLEX, stood at INR 8,000/tonne (t) stable  compared to the last assessment on 18 October, 2022. Limited deals were reported in this publishing window. Increased sponge prices and quite a decent response in the OMC iron ore auction has kept the offers supported.

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.
• Two deals were reported in this publishing window and considered both hence accorded 50% weightage for T1 trade.
• Ten (10) firm offers, bids and indicative prices were reported. Seven (07) were taken for price calculation and given another 50% weightage.
• SteelMint received two bids also at INR 7,550-7,650/t DAP but considered only one in this publishing window.

Raipur-based pellets producers kept their offers (Fe 63%) stable at INR 8,000-8,100/t ($97-98/t) exw against the last assessment. Meanwhile, Godawari Power and Ispat Ltd (GPIL) kept offers stable at INR 8,500-8,600/t exw ($103-104/t).

OMC’s iron ore lump auction for 490,000 t, or 68% of the total quantity put on offer (724,000 t), received bids. Bid prices in the auction increased sharply by up to INR 950/t against the base prices. Another iron ore fines auction 0.944 mnt, or 91% of the total quantity put on offer (1.037 mnt), received bids. The bid price for fines increased by up to INR 450/t against the last auction on 19 Sep’22.

Owing to hike in raw material bids in the auction prices got the pellet offer was supported. However, deals were heard very minimal at the increased offer. At the same time India festivity hit the market leading the trade slow following which bids have fallen by INR 100-200/t against the beginning of this week. As per the sources, post festival may be market reponse positively.

SteelMint’s price assessment for sponge P-DRI (FeM 80%) in Raipur moved up by INR 400/t w-o-w to 31,800/t exw as against INR 31,400/t exw on 14 October.

Region-wise pellet offers and deals: