Rationale: Indian pellet index up INR 100/t on active trades

SteelMint's bi-weekly domestic pellet index "PELLEX" up by INR100/t on Friday (i.e 10th Jul 2020) to INR 6,050/t DAP Raipur in recent deals concluded for a total quantity of 55,000t. Hike in iron ore futures in China also pushed up Indian pellet export offers by $4 w-o-w.

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-:

• Two transactions of 55,000t total were reported at INR 5,950-6,100/t (DAP, Raipur) in this publication window. These transactions were given a 50% weightage in the index.
  
  
• Six offers were considered for calculation in this window with an average price of INR 6,033/t (DAP Raipur) and given a weightage of 12.5%.
  
  
• Five firm bids were recorded in the publishing window at INR 5,900-5,950/t (DAP Raipur) and given a weightage of 12.5%.
  
  
• 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 5,800/t and given a weightage of 12.5%.
  
  
• The export realization was calculated by SteelMint at around Rs 6,200/t DAP Raipur based on a FOB east coast provisional assessment $101/t on 10 Jul'20 and was given a weightage of 12.5%. No pellet export deals were concluded in this window though indicative offers for exports increased by $2-3/t since Monday and are currently at around $113-114/t, CFR China.
  
  

Calculation of Index-:

Source-: SteelMint

Region-wise pellet deals and offers-: