SteelMint’s bi-weekly pellet (6-20mm, Fe 63%) index for the central Indian market of Raipur, PELLEX, recorded total trade volumes at 117,500 t in Oct’21 – a decrease of over 28% from 164,500 t in Sep, as per monthly data compiled by SteelMint.
Trade volumes surged in the beginning of the month, while deals started drying up towards the latter half of Oct as coal and sponge iron prices fell sharply and falling export realisations intensified pressure on pellet prices. PSU miner NMDC, too, had slashed iron ore prices for Oct.
Index heads south
After the Dussehra holidays PELLEX had touched INR 14,000/t DAP Raipur on 16 Oct. Prices of sponge iron produced by pellets, P-DRI, was at around INR 35,500/t in Raipur at that time on the back of higher coal prices.
But after rising sharply over a period of one month, portside prices of South African RB2 grade coal corrected by INR 2,500/t after 20 Oct. P-DRI prices in Raipur also fell.
This pressured PELLEX downwards to INR 13,100/t on 29 Oct. Falling sponge iron prices and muted trade forced central India-based pellet makers to cut their offers. Offers from sellers in Odisha also moved down sharply, with buyers withholding purchases in expectation of a price cut. Subdued export orders and limited domestic deals resulted in increasing the inventory pressure on producers.
SteelMint assesses the weighted average price of Fe 63% pellet at INR 13,350/t DAP Raipur for Oct, although prices have fallen steeply since.
Pellex
Pellex monitors the dynamics of India’s largest merchant pellet market – Raipur. Notably, Chhattisgarh has a share of around 10% in India’s total pellet production. Along with recording sales and offers from Raipur-based producers, the index also tracks deals concluded by pellet producers based in other major markets of the country – Odisha, Karnataka and western India – for sponge iron manufacturers in Raipur. It is a mathematically precise index aiming to provide accurate price assessment for traders.
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