SteelMint: PELLEX stays stable even as deals improve after NMDC price hike

SteelMint’s bi-weekly domestic pellet (Fe 63%) index, PELLEX, at INR 12,650/tonne (t) DAP Raipur on 25 Feb’22, stable against the last assessment on 22 Feb’22. Around 60,000 t pellet deals have been reported in this publishing window. Central India-based pellet players have raised offers today following NMDC’s iron ore price hike, however, trades are yet to take place at increased offers.

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.
• Decent numbers of deals reported around 60,000 t hence taken into consideration in this publishing window, and accorded 50% weightage.
• Six (06) firm offers, bids and indicative prices were reported. All were taken for price calculation and given 50% weightage.
• SteelMint did not receive any bid, hence, given no weightage in the index calculation.

Godawari Power and Ispat Ltd. (GPIL) increased domestic pellet offers by INR 400/t ($5/t) from INR 12,600/t ($167/t) to INR 13,000/t exw ($173/t). Other producers in Raipur and central India also hiked offers to INR 12,700/t exw today. Hike in NMDC’s iron ore prices and sponge iron prices led to the rise in pellet offers, SteelMint notes. NMDC has raised iron ore prices further by upto INR 680/t. Revised offers for Baila fines (Fe 64%) stand at INR 4,560/t ,up by INR 300/t.

A Jharsuguda, Odisha-based pellet maker is offering at around INR 11,600-11,800/exw.  One deal has also been concluded so far this week with quoted offer.

Coal continues to be at higher price. In a confirmed deal, 2,000 t of South African RB2 (5500 NAR) coal was sold at INR 16,000/t at Vizag port, while no major deals were reported at Gangavaram due to lack of available stocks.

Pellet-based DRI (P-DRI, FeM 80%) prices in Raipur increased INR 1,600/t w-o-w to INR 36,300/t exw compared to last week’s offers. However, on a daily basis, prices have increased sharply around INR 600/t today.

Indian pellet market overview: Domestic pellet prices shown some mixed response across the states.

Iron ore pellet (Fe 63%) prices in Bellary inched up to INR 10,200/t exw today against INR 10,100/t on 22 Feb, as per SteelMint’s assessment.

No confirmed deal was reported in the current publishing window. Prices are expected to rise further in the near future as sponge and coal prices are rallying.

Region-wise pellet offers and deals: