SteelMint: PELLEX down by INR 100/t on limited buying inquiries

SteelMint's bi-weekly domestic pellet index "PELLEX" fell slightly by INR 100/t on today (25thSept'20) to INR 8,700/t DAP Raipur. No trade was recorded in this publishing window and traders indicated limited buying inquiries.

Major pellet buyers are reluctant to buy pellet at increased offers. "One of the buyer told SteelMint that current offer is not feasible for them considering recent decline in sponge prices". Pellet sponge (P-DRI) prices moved down to INR 18,800-19,000/t exw-Raipur. On weekly basis, prices have come down by INR 500-600/t against INR 19,400/t a week before.

Shortage of iron ore and the related issues are hovering around and bringing uncertainty in the market.

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 deal has been reported in this publishing window. Transaction weightage remained nil.
  
  
• Four firm offers were reported this week at INR 8,950/t (DAP, Raipur) and the rest three from outside Raipur at INR 9,050-9,100/t (DAP, Raipur) which have been given a weightage of 50%.
  
  
• Four firm bids have been reported but only two bids taken for price calculation at INR 8,550-8,650/t DAP, Raipur in this publishing window, and given a weightage of 50%.
  
  
• 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 7,100/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 and heated discussions on illegal pellet exports from India.
  
  

Calculation of Index:

Source-: SteelMint

Region-wise pellet deals and offers: