SteelMint: PELLEX up INR 250/t in recent trades

SteelMint’s bi-weekly domestic pellet index “PELLEX” increased by around INR 250/t today (03rd Nov’20) to INR 9,350/t, DAP Raipur in recent deals. Deal for 15,000 t pellet has been concluded by Raipur based pellet maker in this publishing window.

Godawari Power & Ispat has increased offer by around INR 400-500/t to INR 9,600/t (ex-plant) in the last 4 days.

Pellet makers from Raigarh and Jharsuguda have hiked offers this week as forecasted by SteelMint last week. Jharsuguda based pellet maker increased its offer by around INR 1,000-1,100/t to INR 9,500/t exw, in a week.

Increased iron ore prices amid scarcity of high-grade ore by Odisha miners has led in hike in pellet offers.

Pellet sponge (P-DRI) prices have increased further in the last one week by around INR 600-700/t w-o-w to INR 22,300/t exw, Raipur. However, on a daily basis sponge prices have increased marginally by INR 100/t today.

Market overview-: Pellet prices in other regions like Durgapur and Bellary have also been increased very sharply by INR 500-700/t w-o-w amid hike in sponge prices.

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 15,000 t pellets have been concluded by Raipur based pellet makers in this publishing window at INR 9,250/t (DAP Raipur). This transaction was taken into consideration for price calculation and weightage given 80%.
• Two firm offers were reported this week at INR 9,250-9,750/t (DAP, Raipur) and the rest three from outside Raipur at INR 9,750-10,150/t (DAP, Raipur) which have been given a weightage of 20%.
• No firm bid has been reported 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 8,000/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.

Calculation of Index:

Source-: SteelMint

Region-wise pellet deals and offers: