SteelMint’s bi-weekly domestic pellet index “PELLEX” has increased by INR 150/t to INR 9,900/t today (10th Nov’20) DAP Raipur, in the recent deal. Around 10,000 t pellet deal has been concluded by a Raipur based pellet maker in this publishing window.
Raipur based pellet makers have kept the offers stable at INR 9,700-9,800/t (ex-plant) in this week.
However, Odisha’s merchant miner – Rungta Mines has raised iron ore fines offers, sources have reported SteelMint. Revised price for Fe 62% fines stands at INR 5,500/t ex-mines while that of Fe 60% fines offer at INR 4,500/t ex-mines basis (including royalty, DMF & NMET). Offers have increased by around INR 1,250/t in last two-week’s time.
On the other side, Pellet sponge (P-DRI) prices are assessed at INR 22,250/t exw, Raipur, down by INR 350/t today.
SteelMint’s benchmark price assessment for billet has come down by INR 600/t w-o-w. Market sources highlighted less clarity on market outlook considering fall in semi-finished steel prices.
Market overview-: Pellet prices in other regions like Durgapur and Bellary have remained stable by w-o-w amid scarcity of high-grade iron ore and limited. However, as per the sources hike in iron ore offers by Rungta led the offer omitted by Durgapur based pellet maker.
Rationale – PELLEX has been derived using five data points: i.e trades, offers, bids, substitute parity, and export realizations. You can download the detailed methodology by clicking on this link Click here.
- Deal for 10,000 t pellet has been concluded by a Raipur based pellet makers in this publishing window at INR 9,850-9,950/t (DAP Raipur). This transaction was taken into consideration for price calculation and weightage given 80%.
- Three firm offers were reported this week at INR 9,950/t (DAP, Raipur) and the rest four from outside Raipur at INR 10,150-10,400/t (DAP, Raipur) which have been given a weightage of 20%.
- Two firm bids were reported at INR INR 9,150/t (DAP, Raipur) and was not considered in price calculation in this publishing window, and given a weightage of 0%.
- SteelMint calculated the price at which Raipur pellet can displace NMDC lump in the sponge rotary kiln feed (substitute parity) on a DAP Raipur basis at INR 8,250/t and given a weightage of 0%.
- The export realization factor has not been considered as pellet makers are less active in exports owing to an increased domestic realization. With increase in domestic demand, GPIL has shifted sales in local market and reduced export volumes, company mentioned its quarterly presentation.
Calculation of Index:
Source-: SteelMint
Region-wise pellet deals and offers:
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