PELLEX Remains Stable on Limited Trades

PELLEX remained stable at INR 5,950/wmt(DAP Raipur) amid limited quantity deals. Few small deal (less than 2,000 MT each) were reported at INR 6,150/MT (DAP Raipur) from Raipur. However, these have ignored for PELLEX assessment (as per SteelMint methodology).

Raipur based pellet makers have kept their offers stable at 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 5,700-5,800/MT(Ex-plant), normalizing freight to Raipur at INR 6,350-6,450/MT (DAP Raipur). Yesterday one deal was concluded by Raigarh based pellet for 5,000 MT at INR 5700/MT (Ex-plant).

No firm bids were reported amid dull demand and upcoming festival holidays.

One export deal was reported in this publishing window by Durgapur based pellet maker at around USD 106/MT CFR for Fe 64% grade (Al 3%). Pellet Exports indications stand for Fe 64% (3% Alumina) at around USD 92/MT FoB India.

Considering the land cost of Lump and other factors like yield, conversion cost etc for NMDC and Orissa; the substitute parity price for Pellet is INR 5,650 (DAP Raipur).

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.