SteelMint: PELLEX up by INR 200/t in recent trades

SteelMint’s bi-weekly domestic pellet index “PELLEX” has moved up INR 200/t to INR 12,150/t DAP Raipur. Two pellet deals with a total quantum of 12,000 t have been reported in this publishing window. However, market participants reported that market sentiments are slightly dull due to drop in P-DRI prices. Pellet sponge (P-DRI) prices have decreased by INR 100/t d-o-d.

Raipur based pellet makers have kept their offers stable this. The current offers stand at around INR 12,150-12,450/t (DAP, Raipur). Pellet offers from Jharsuguda are at 12,150/t (DAP Raipur).

Most of Raipur based units are not much interested to buy pellets at current offers and continue to prefer NMDC ore for better margin.

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.

• Two pellet deals have been concluded in this publishing window. one for 10,000 t at INR 12,150/t (DAP, Raipur) considered for price calculation and weightage given 80%. Another deal was concluded for 2,000 t at INR 12,450/t (DAP, Raipur) but it was not considered for price calculations, as it was not falling under SteelMint methodology under quantity constraint.
• Three firm offers from Raipur players were reported this week and all offers were taken for price calculation at INR 12,150-12,450/t (DAP, Raipur) and the rest three from outside Raipur at INR 12,150-12,600/t (DAP, Raipur) and given a weightage of 20%.
• No firm bid was reported in this publishing window hence not considered for price calculation and given weightage 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 10,730/t and given a weightage of 0%.
• The export realization factor was not considered owing to no firm deals being reported. Hence, pellet export realization was given a weightage of 0%.

Calculation of Index:

Source-: SteelMint

Region-wise pellet deals and offers: