SteelMint: PELLEX stays stable in total absence of trade

SteelMint’s bi-weekly domestic pellet index, PELLEX, remains stable at INR 15,550/t DAP Raipur. Deals are still not happening as there is disparity between bids and offers. Buyers are showing almost no interest at purchasing material at prevailing high rates.

However, Raipur-based pellet producers have kept offers unchanged, with current offers for Fe 62.5%/63% pellets standing at INR 15,500-16,000/t exw. Raigarh-based producers have cut offers around INR 200/t to INR 14,800/t exw.

As per sources, pellet makers from Raipur who were earlier planning to take maintenance shutdowns have now postponed such plans.

Jharsuguda-based pellet makers have also kept offers stable at INR 14,600-14,800/t exw. As the market is volatile for the last few days, buyers have turned more watchful.

With Raipur-based furnaces having already slashed production and running at lower capacities, demand for pellets is expected to remain weak. Meanwhile, India’s largest government-owned merchant iron ore miner, NMDC, has cut iron ore prices for Jul deliveries by INR 200-230/t, giving some relief to secondary players.

State PSU miner, Odisha Mining Corporation (OMC), has decided to re-conduct the 1.06 mn t of iron ore fines e-auction held on 8 Jul, as per latest reports available with SteelMint.
P-DRI prices in Raipur have inched down by INR 100/t on daily basis to INR 29,000/t exw. However, on a weekly basis prices have increased around INR 150/t against last week’s price of INR 28,350/t.

Indian pellet market overview-: Indian pellet prices across regions exhibit mixed trends. SteelMint’s assessment for Bellary iron ore pellet (Fe 63%) increased by around INR 500-700/t against the last assessment on 9 Jul. However, other markets were stable except Jamshedpur where offers have fallen by around INR 100-200/t.

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.
• Ten firm offers and indicative prices were reported. Two were from Raipur and the rest from outside the state capital. Eight were taken for price calculation and given a weightage of 100%.
• SteelMint also received two bids at INR 13,000-14,500/t exw-Raipur which did not qualify for price calculation of the index.

Region-wise pellet offers and deals: