SteelMint: PELLEX climbs higher in Jan'22 despite 25% drop in trade volumes

SteelMint's domestic iron ore pellet index, PELLEX, witnessed strong trade volumes in Jan'22, reaching the second-highest level in 15 months, although volumes fell around 25% month-on-month to 179,500 tonnes (t) from around 240,000 t in Dec.

In Dec, total volumes had increased a whopping 150% on the month. The index, which tracks the Raipur market in central India, saw an upswing throughout Jan on rising domestic and export demand amid surging coal and sponge iron prices.

Active restocking demand ahead of the Lunar New Year holidays starting in Feb buoyed market sentiment. However, trade volumes fell m-o-m as PSU miner NMDC's iron ore rake movements to Chhattisgarh-based units rose to 103 in Jan compared to 92 in Dec, as per SteelMint data. Raipur-based sponge iron units preferred NMDC iron ore lump over pellets after the miner reduced prices for Jan.

Prices trend higher

The index rose by INR 1,450/t for Fe 63% pellet through the month. SteelMint's weighted average assessment stood at INR 11,388/t DAP Raipur compared with INR 10,172/t in Dec - an increase of around 12% on the month.

Pellet prices picked up towards the latter half of the month following a rise of 30% in OMC's iron ore lump auction for 860,000 t in mid-Jan.

NMDC, too, raised lump ore prices by INR 350/t for Feb towards the end of the month on rising prices in Odisha amid constraints in availability of high-grade ore, rising steel prices and surging pellet export prices.

PELLEX

Pellex monitors the dynamics of India's largest merchant pellet market - Raipur. Along with recording sales and offers from Raipur-based producers, the index also tracks deals concluded by pellet producers based in other major markets of the country - Odisha, Karnataka and western India - for sponge iron manufacturers in Raipur. It is a mathematically precise index aiming to provide accurate price assessment for traders.