SteelMint: PELLEX up INR 500/t in recent deal, sponge prices recover

SteelMint’s bi-weekly domestic pellet (Fe 63%) index, PELLEX, stands at INR 12,650/tonne (t) DAP Raipur on 18 Feb’22, up INR 500/t against the last assessment on 15 Feb’22. A pellets deal of around 10,000 t was confirmed at INR 12,650/t (DAP, Raipur) in this publishing window.

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.
• One deal was reported and hence taken into consideration in this publishing window, and accorded 50% weightage.
• Seven (07) firm offers, bids and indicative prices were reported. Five (05) were taken for price calculation and given 50% weightage.
• SteelMint received single bid but not qualified for the index calculation.

Pellet-makers in Raipur kept offers stable at INR 12,500-12,600/t exw. Still few producers are offering in central India due to maintenance breaks and lack of material availability.

A Jharsuguda, Odisha-based pellet producer resumed offering in the market They have sold some pellet tonnages too in the last two days at around INR 11,800-11,900/exw.

Sponge makers are still not actively interested in buying pellets at the prevailing offers. On the other hand, high coal and raw material offers kept them away from pellet buying. On high raw material offers, bid-offer disparity increased further. Buyers are mostly preferring NMDC DRCLO or using previous stock. They are mostly in wait-and-watch mode.

In a confirmed deal, 2,000 t of South African RB2 (5500 NAR) coal was sold at INR 16,000/t at Vizag port, while no major deals were reported at Gangavaram due to lack of available stocks.

Pellet-based DRI (P-DRI, FeM 80%) prices in Raipur increased INR 1,000-1,100/t w-o-w to INR 34,650/t exw compared to last week’s offers. However, on a daily basis, prices have come down by INR 200/t.

A steep fall in spot iron ore prices in China amidst the decline in futures prices has weighed down Indian pellet export prices. SteelMint’s India pellet (Fe 63%, 3% Al) export index (FOB east coast) stands at $156/t.

Indian pellet market overview: Domestic pellet prices have exhibited mixed response across the regions this week so far.

Iron ore pellet (Fe 63%) prices in Bellary decrease to INR 10,100/t exw today against INR 10,250/t on 15 Feb, as per SteelMint’s assessment. Confirmed deals for 13,500 t were confirmed in this publishing window at around INR 10,000-10,200/t exw.

Region-wise pellet offers and deals: