SteelMint: PELLEX declines further on lower bids as buyers await price clarity

SteelMint's bi-weekly domestic pellet (Fe 63%) index, PELLEX, stood at INR 11,600/tonne (t) DAP Raipur on 15 Apr'22, down INR 100/t compared with the last assessment on 12 April. A few deals were heard in this publishing window but could not be confirmed from either the buyers or sellers.

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.
  
  
• Limited deals were reported but not taken into consideration in this publishing window . Hence accorded 0% weightage for T1 trade.
  
  
• Ten (10) firm offers, bids and indicative prices were reported. Seven (07) were taken for price calculation and given 100% weightage.
  
  
• SteelMint received two bids and considered for calculation of the index.
  
  

Raipur, Chhattisgarh-based pellet producers kept their offers stable at INR 12,000-12,300/t exw ($157-162/t).

Jharsuguda-based producers kept offers at INR 10,500-10,600/t exw. A few deals were heard in this publishing window to have been concluded for the local market.

Gaps between offers and bids continued to prevail, which was the key reason for slowing down the market momentum. Buyers are expected to conclude a few deals in the next week once the market shows some clarity in prices.

Pellets-based DRI (P-DRI, FeM 80%) prices in Raipur stood at INR 37,500/t exw, up by around INR 1,500/t w-o-w. On a daily basis, sponge iron prices increased by around INR by 1,300/t.

OMC cuts base price for upcoming iron ore e-auctions:

State-run Odisha Mining Corporation (OMC) has scheduled an auction for iron ore fines and lump on 18 Apr'22. Around 666,000 t of iron ore lump and 950,000 t of fines will be put up for auction from OMC's mines. The miner has decreased the base price for fines by up to INR 350/t and that for lump by up to INR 875/t as against the last auction on 15 March.

Indian pellets market overview: Domestic pellet prices inched down sharply in Jamshedpur and Barbil but not in Bellary where prices increased on rising pellet sponge and billet prices.

• The current assessment for Barbil pellet (Fe 63%) stands at INR 10,500/t loaded on to wagon, down INR 1000/t as against 12 April. Deals for 20,000 t of pellets were recorded at INR 10,500/t during the present assessment period.
  
  
• Pellet (Fe 63%) prices in Bellary rebounded to INR 10,000/t exw today as against INR 9,700/t on 12 April. Deals for 18,000 t were confirmed in this publishing window at similar price levels.
  
  

Region-wise pellets offers and deals: