SteelMint pellet index up by INR 450/t on hike in offers

SteelMint's bi-weekly domestic pellet index "PELLEX" increased sharply by INR 450/t on Friday (14th Aug'20) at INR 8,250/t DAP, Raipur. Iron ore & pellet offers have continued to rally on supply concerns.

Raipur pellet makers have continued to increase offer prices but trades have thinned on higher offers. NMDC announced has increased iron ore fines and lump prices twice this month while Essel Mining has raised August prices thrice in August, with the latest hike announced today.

Some pellet makers from Raipur and areas around the city are still not offering as these are shut down for maintenance.

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 1,000 t was reported today at INR 8,450/t (DAP, Raipur) by a Durg based pellet buyer. This transaction was given a 57.1% weightage in the index.
  
  
• Two firm offers were reported this week at INR 8,650/t (DAP, Raipur) and the rest three from outside Raipur at INR 8,650-8,800/t (DAP, Raipur) which have been given a weightage of 14.3%.
  
  
• Two firm bids were reported at INR 8,250-8,350/t (DAP, Raipur) in this publishing window and given 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 6,900/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 demand.
  
  

Calculation of Index:

Source-: SteelMint

Region-wise pellet deals and offers: