SteelMint: PELLEX climbs to two-month high as prices rise in recent deals

SteelMint's bi-weekly domestic pellet (Fe 63%) index, PELLEX, stands at INR 11,300/tonne (t) DAP Raipur on 14 Jan'22, up INR 150/t against the last assessment on 11 Jan'22.

Around 42,000 t of deals were reported in the last two-three days. PELLEX has climbed to a two-month high as similar price levels were last seen in mid-Nov'21.

Rationale:

• PELLEX has been derived using data points: i.e. trades, offers and bids. You can download the detailed methodology by clicking on this link Click here.
  
  
• Three deals were reported out of which two were considered in this publishing window as T1 trades for calculation of the index; accorded 50% weightage.
  
  
• Ten (10) firm offers and indicative prices were reported. Seven (07) were taken for price calculation and given 50% weightage.
  
  
• SteelMint received no bids and hence no bid was considered for calculation of the index.
  
  

Central India-based pellet-makers kept offers stable at INR 11,100-11,500/t exw. Price indications in Jharsuguda, Odisha increased by INR 100-200/t to INR 10,400-10,500/t exw on 14 Jan.

Hike in pellet export prices and sponge iron prices on the rally in coal prices lent support to domestic pellet offers.

A leading eastern India-based pellet-maker concluded an export deal for 55,000 t of pellets (Fe 63%, 3.5% Al) recently. The deal was heard concluded at $164/t CFR, sources confirmed. Active enquiries and restocking demand from China ahead of the Lunar New Year holidays kept pellet export prices supported.

Pellet-based DRI (P-DRI, FeM 80%) prices rose by INR 1,200/t to INR 32,400/t exw Raipur w-o-w. On a daily basis, prices inched down INR 100/t. Prices rallied on active demand amidst slight supply shortage, coal price rally and rising billet prices.

Portside prices of South African RB2 (5500 NAR) grade coal rose by INR 700/t this week amid low stocks at major ports.

Indian pellet market overview: The Indian pellet market continues to witness rise in offers across regions in the range of INR 100-450/t except in Bellary and western India.

Region-wise pellet offers and deals: