SteelMint: PELLEX down by INR 100/t in absence of trades

SteelMint's bi-weekly domestic pellet index "PELLEX" has decreased by INR 100/t to INR 11,500/t DAP Raipur. No deal has been reported for Raipur market in this publishing window.

Pellet makers in Raipur have kept their offers unchanged at INR 11,500/t (ex-plant). However, offers from Jharsuguda increased by around INR 100/t.

As per the market sources, Raipur based buyers are prefering NMDC DRCLO for better margin than pellets despite recent price hike. National Mineral Development Corporation (NMDC) raised iron ore prices upto 14% from Chhattisgarh based mines for Dec'20.

NMDC's iron ore rake movement from its Chhattisgarh mines to state-based steel units has moved up 35% to 77 rakes (0.30 mn t) in Nov'20 compared to 57 rakes (0.22 mn t) a month ago, as per railway movement data maintained with SteelMint.

On the other hand, Odisha's leading miner - Odisha Mining Corp (OMC) has received an overwhelming response and booked the entire quantity with the hike in bids upto INR 3,800/t over base price this week.

Pellet sponge (P-DRI) prices have increased around INR 500/t w-o-w to INR 25,200/t exw, Raipur. However, on a daily basis prices have fallen by around INR 100/t today.

Rationale - 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.

• No pellet deal has been concluded in this publishing window therefore it was not considered for price calculation and weightage given 0%.
  
  
• Five firm offers were reported this week and only four offers were taken for price calculation at INR 11,650/t (DAP, Raipur) and the rest four from outside Raipur at INR 11,350-11,450/t (DAP, Raipur) and given a weightage of 100%.
  
  
• No firm bids reported and not considered in price calculation in this publishing window, and given a weightage of 0%.
  
  
• 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 9,800/t and given a weightage of 0%.
  
  
• 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: