PELLEX Up Marginally Amid Active Transactions

PELLEX up marginally by INR 50/MT at INR 5,900/wmt (DAP Raipur) amid active transactions reported. 5,000 MT pellet deals reported to Raipur market and remaining 8,000 MToutside Raipur at INR 5,700- 5,800/MT(Ex-plant); normalizing freight to Raipur at INR 5,850-5,950/MT (DAP Raipur).

Raipur based pellet offers stable at INR 5,800/MT( Ex-plant); normalizing for freight to Raipur at INR 5,950/MT (DAP Raipur).

Four bids were reported at INR 5,650-5,750/MT (DAP Raipur). SteelMint P-DRI Assessment (Oct 15, 2019) increased by INR 200/MT to INR 15,900/MT (Ex-Raipur) against INR 15,700/MT last week.

Two Pellet export deals were reported to China in this publishing window. An Eastern India based steel Pellet maker for Fe 64% grade and, 3% Al at around USD 93/MT, FoB India equivalent to USD 105-106/MT CFR China. Another pellet export deal concluded by Central India base Pellet maker for Fe 64% grade and, 2% Al at around USD 110/MT CFR China.

In Central India, the export market is semi-liquid; therefore the export realization 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.