PELLEX Down by INR 100/WMT(DAP Raipur)

PELLEX down by INR 100/MT to INR 6,050/wmt (DAP Raipur) amid reduced pellet offers. No deals were reported but certain deals are under negotiation in this publication window.

Raipur based pellet maker decreased pellet offers by INR 200 to INR 6,000/MT( Ex-plant); normalizing for freight to Raipur at INR 6,150/MT (DAP Raipur). Raigarh based pellet maker offering pellet at INR 6,000/MT(Ex-plant), normalizing for freight to Raipur at INR 6,650/MT (DAP Raipur).

Three bids were reported at INR 5,650-5,950/MT (DAP Raipur).

No export deals reported in this publishing window. Pellet Exports indications stand for Fe 64% (3% Alumina) at around USD 92-93/MT, FoB India. In Central India the export market is illiquid, therefore export realization factor has been ignored in the computation of PELLEX.

NMDC C.G on 19th Sept announced a cut in its iron ore fines and lumps prices by INR 200/MT and DR-CLO by INR 230/MT.Since iron ore movement from NMDC and Odisha has slowed amid monsoon, substitute parity factor has been ignored in the computation of PELLEX.

Why PELLEX? India has installed pellet capaci1ty of 85 MnT pa and an annual production of around 65-66 MnT. 5 major states - Odisha (28.9 MnT), Karnataka (19.5 MnT), Chhattisgarh (9.6 MnT), Jharkhand (8.4 MnT) and Andhra Pradesh (8 MnT) - covers around 85-90% of the capacity. Based on the above we have chosen Raipur as our index base as this market seems more active from a domestic merchant trading perspective along with exports. Also, Chhattisgarh has a good base for sponge iron makers (DRI) who procure a decent amount of pellets.

These factors have led SteelMint to launch this index of PELLET on DAP Raipur basis.
The proposed specifications, along with delivery terms were devised following consultation with market participants. They are as follows:
1. Fe Content - Fe 63-64%
2. Combined Silica & Alumina - 7%
3. Trade Size - 2,500-10,000 MT
4. Payment terms - Advance

SteelMint will continue to monitor changes in the pellet markets and will adjust its methodology in accordance with the market participants.

To provide feedback/suggestions, please contact info@steelmint.com

Click here to see SteelMint Pricing Methodology and Rationale documents.