India: PELLEX falls further in recent deals

SteelMint's bi-weekly domestic pellet (Fe 63%) index, PELLEX, has fallen further to INR 9,500/tonne (t) DAP Raipur on 03 Dec'21, lower by INR 150/t against the last assessment of INR 9,650/t on 30 Nov. Confirmed deals of around 47,000 t were reported at around INR 9,200-9,600/t DAP Raipur in this publishing window.

A few deals of around 5,000 t from Odisha were also reported at INR 9,200/t DAP, Raipur.

Central India-based pellet makers have kept offers stable. Current offers stand at INR 9,500-9,800/t exw-Raipur. Sellers in Odisha's Jharsuguda have also lowered offers by around INR 500-600/t in recent deals.

"Pellet offers have continued to remain under pressure amid lower realisations in exports along with limited bids from sponge players," said a trader.

Fire at NMDC-CG likely to affect iron ore production

A conveyor belt caught fire at NMDC's iron ore Deposit 5 in Chhattisgarh on Wednesday (1 Nov'21) night. According to sources, the incident and subsequent damage caused is likely to affect production of iron ore for around four days. Notably, the state-run miner's Deposit 5 has an EC limit of 10 million tonnes (mn t) per annum of iron ore production.

If sources are to be believed, supplies of DR-CLO from the miner may remain impacted for the coming few days, as a result of which, Raipur buyers, perhaps, will try to secure more pellets.

SteelMint's assessment for sponge iron, P-DRI (FeM 80%), in Raipur stood at INR 27,100/t exw, down sharply by around INR 1,700/t against last week. On a daily basis, prices have come down by INR 800/t. Sponge prices have dropped to 8-months low as the same range was last seen in Mar'21.

Indian pellet market overview: Indian pellet market witnessed incessant drop in prices in the range of INR 350-900/t. However, prices in western India remain stable.

Bellary iron ore pellet (Fe 63%) prices dropped to INR 10,000-10,200/t. Also, offers in Barbil were down by around INR 700-900/t to INR 7,800-8,200/t.

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.
  
  
• Multiple deals were reported, around 47,000 t, in this publishing window, hence, considered as T1 trade for calculation of the index; accorded 50% weightage.
  
  
• Seven (07) firm offers and indicative prices were reported. Five (05) were taken for price calculation and given 50% weightage.
  
  
• SteelMint received no bids for calculation of index.
  
  

Region-wise pellet offers and deals: