PELLEX up by INR 350/t in recent trades of around 30,000 t

SteelMint's bi-weekly domestic pellet index "PELLEX" increased sharply by INR 350/t on Friday (11th Sept'20) to INR 9,100/t DAP in the deals concluded recently. Around 27,000 t deals were reported by both Raipur and outside Raipur based pellet makers in this publishing window.

One of the Raipur based pellet makers is still on maintenance shut down. However, Jharsuguda based pellet maker concluded a deal of around 10,000 t to Raipur after it resumed operations post maintenance shut down this week. In addition to it, two pellet pellets makers from Raipur also sold pellets recently.

However, pellet sponge prices moved down on dull demand and stood at INR 19,600/t exw-Raipur. On weekly basis prices down by around INR 600/t against INR 20,200/t a week before.

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

Assigning weightage to data points:

• Three deals concluded in the local Raipur market by pellet makers cumulatively around 27,000 t at INR 8,950-9,150/t (DAP, Raipur) in this publishing window. They were considered for price calculation and given a weightage of 80%.
  
  
• Three firm offers were reported this week at INR 8,950-9,350/t (DAP, Raipur) and the rest four from outside Raipur at INR 9,200 - 9,250/t (DAP, Raipur) which have been given a weightage of 20%.
  
  
• No firm bid has been reported for the price calculation 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 7,300/t and given a weightage of 0%. As the rake movement has slowed down due to monsoons and has decreased to 12 rakes (between 1st to 10 Sept'20) against 17 rakes of last month in the same timeframe, not considered for price calculation.
  
  
• 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: