SteelMint: PELLEX stays stable even in absence of buying enquiries

SteelMint’s bi-weekly domestic pellet index, PELLEX, remains stable at INR 15,550/t DAP Raipur. Deals were not heard as there are no firm buying enquiries at quoted offers on falling margins. A few trade sources expect prices to soften somewhat in the short-term considering the bid-offer disparity, preference for iron ore and absence of pellet trades.

However, Raipur-based pellet producers have kept offers unchanged, with current offers for Fe 62.5%/63% pellet standing at INR 15,500-16,000/t exw. Raigarh- and Jharsuguda-based producers have also kept their offers stable at INR 14,800/t exw.

As per sources, a pellet producer from Raipur may opt for maintenance shutdown from the next week. Another major pellet maker is planning to take a shutdown, while the date remains unconfirmed.

A couple of recently floated Indian iron ore pellet export tenders have received poor response. Disparity in bids and offers has kept the market muted. SteelMint’s India pellet export index (Fe 64% 3% Al, FoB east coast) has declined by $25/t w-o-w, last assessed at $221/t on 14 Jul’21. Limited buying enquiries for pellet from China have dragged Indian pellet export prices down.

SteelMint’s benchmark pellet sponge (P-DRI, FeM 80%) prices rose slightly by INR 100/t to INR 29,100/t exw Raipur on 16 Jul’21. On weekly basis too prices for P-DRI increased by around INR 400/t. Enquiries remain active following required support from rising billet demand, which has led to a slight increase in sponge prices.

Indian pellet market overview-: Durgapur and Bellary pellet prices have softened by INR 200/t against 13 Jul; however, prices in other regions continue to remain firm.

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 in this publishing window that could have been considered as T1 for index calculation and given a 0% weightage.
• Seven firm offers and indicative prices were reported. Two were from Raipur and the rest from outside the state capital. Six were taken for price calculation and given a weightage of 100%.
• SteelMint also received one bids at INR 14,000-14,500/t exw-Raipur which did not qualify for price calculation of the index.

Region-wise pellet deals and offers: