SteelMint pellet index down marginally on softening sponge offers

SteelMint's bi-weekly domestic pellet index "PELLEX" fell by INR 100/t on Friday (31st Jul'20) to INR 6,850/t DAP Raipur. Few Raipur based pellet makers are still not offering pellets after concluding deals for higher quantity recently. However P-DRI prices have come down by INR 400/t this week, which capped price gains to some extent.

NMDC Ltd, India's largest iron ore producer, has increased fines and lump price by INR 200/t while the price of DR CLO (calibrated lump ore) has been increased by INR 230/t for Aug'20 against Jul'20.

The 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:

• One transaction of 35,000 t was reported at INR 6,950/t (DAP, Raipur) by a Raipur based manufacturer. This transaction was given a 57.1% weightage in the index.
  
  
• Firm offers were reported from Durg and Odisha which have been given a weightage of 14.3%.
  
  
• Two firm bids were recorded at INR 6,850-6,950/t (DAP, Raipur) and a weightage of 14.3%.
  
  
• 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 6,000/t and given a weightage of 14.3%.
  
  
• The export realization factor has not been considered as pellet makers are less active in exports owing to an increase in domestic offer prices.
  
  

Calculation of Index:

Source-: SteelMint

Region-wise pellet deals and offers: