SteelMint pellet index falls in absence of trades

SteelMint's bi-weekly domestic pellet index "PELLEX" decreased sharply by INR 500/t on Friday (21st Aug'20) at INR 7,800/t DAP, Raipur in absence of trades and the recent plunge in semi-finish steel prices.

Raipur pellet makers have kept offers stable. However, no deals were reported in this publishing window. Few sponge manufacturers are looking to resell pellets in the market, SteelMint learnt from few sources.

Raipur pellet sponge prices have come down by around INR 2,400/t in the last 2-days to INR 18,900/t exw Raipur on limited trades.

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:

• No domestic pellet deal has been concluded so far this week from Raipur and a nearby city, so there was no T1 category of inputs.
  
  
• Four firm offers were reported this week at INR 8,550 - 8,650/t (DAP, Raipur) and the rest three from outside Raipur at INR 8,650-8,750/t (DAP, Raipur) which have been given a weightage of 33.3%.
  
  
• Three firm bids were reported but only one of them has been considered for price calculation at INR 8,150/t (DAP, Raipur) in this publishing window and given a weightage of 33.3%.
  
  
• 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 6,500/t and given a weightage of 33.3%.
  
  
• The export realization factor has not been considered as pellet makers are less active in exports owing to an increase in domestic demand.
  
  

Calculation of Index:

Source-: SteelMint

Region-wise pellet deals and offers: