SteelMint pellet index up INR 200/t; trades remain limited

SteelMint's bi-weekly domestic pellet index "PELLEX" increased by INR 200/t on Tuesday (25th Aug'20) at INR 8,000/t DAP. One deal was reported by a Raipur based pellet maker in this publishing window. Pellet sponge offers have also recovered today by around INR 250/t to INR 19,100/t exw on improved trades.

Raipur pellet makers have kept the offers stable. However, the buyers are still skeptical about the market to buy pellets. Few steel makers told SteelMint that they are waiting to get the sponge market stabilize before making any firm bids.

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 domestic pellet deal has been concluded for 3,000 t at INR 8,150/t (DAP, Raipur) a few days back and it was considered for price calculation which has been given a weightage of 57.1%.
  
  
• Three firm offers were reported this week at INR 8,650/t (DAP, Raipur) and the rest three from outside Raipur at INR 8,250-8,750/t (DAP, Raipur) which have been given a weightage of 14.3%.
  
  
• Three firm bids were reported but only one of them has been considered for price calculation at INR 7,650 - 8,050/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 6,820/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 increased domestic realization.
  
  

Calculation of Index:

Source-: SteelMint

Region-wise pellet deals and offers: