Rationale: Indian pellet index increases by INR 150/t on active trades

SteelMint's bi-weekly domestic pellet index "PELLEX" rose by INR 150/t on Tuesday (i.e 14th Jul 2020) to INR 6,200/t DAP Raipur on recent deals and higher offers. Increased buying interest from China and surge in Dalian iron ore futures lifted pellet export prices.

This price 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 transactions of around 30,000t total were reported at INR 6,150-6,200/t (DAP, Raipur) in this publication window. These transactions were given a 57% weightage in the index.
  
  
• Five offers were considered for calculation in this window with an average price of INR 6,340/t (DAP Raipur) and given a weightage of 14.3%.
  
  
• No firm bids were recorded in the publishing window and thus weightage remained nil.
  
  
• 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 5,900/t and given a weightage of 14.3%.
  
  
• The export realization was calculated by SteelMint at around Rs 6,500/t DAP Raipur based on a FOB east coast provisional assessment $105/t on 14 Jul'20 and was given a weightage of 14.3%. One pellet export deal has been concluded by an Odisha based major pellet maker recently this week for 55,000t (Fe 64%, 3% Al) at $118/t, CFR China for July loading though indicative offers for exports increased by $3-4/t since Monday and are currently at around $117-118/t, CFR China.
  
  
• Calculation of Index-:
  
  Source-: SteelMint
  
  Region-wise pellet deals and offers: