SteelMint: PELLEX drops INR 300/t as market awaits NMDC's price revision

SteelMint's bi-weekly domestic pellet (Fe 63%) index, PELLEX, moved down by around INR 300/t to INR 11,800/t DAP Raipur on 3 Sept'21. Only one deal was recorded by SteelMint during the current assessment period that was concluded at around INR 11,500-11,800/t DAP Raipur.

Raipur-based pellet makers have kept offers stable at INR 12,000-12,300/t exw. Buyers are eagerly waiting for NMDC's price revision that is expected soon and are anticipating a downward correction.

NMDC's iron ore rake movements to Chhattisgarh-based units were recorded at 41 in Aug compared to 66 a month ago, a decrease of 36%, m-o-m. However, the weak response elicited by OMC auctions in end-Aug has created the impression that another price cut is highly likely. This is the reason for Chhattisgarh-based consumers to hold back purchases waiting for prices to drop.

A Jharsuguda-based producer has lowered offers by INR 100/t and current offers have been floated at around INR 11,400/t exw. However, pellet producers in Raigarh continue to keep offers stable at INR 12,000/t exw.

As per sources, there are limited enquiries for pellet and buyers' bids are lower than prevailing offers in the market.

Sponge P-DRI (FeM 80%) prices in Raipur rose slightly by INR 100/t to INR 29,800/t exw on 2 Sept. However, demand stays flat.

Indian pellet market overview:

Indian pellet prices fell continuously this week by around INR 150-400/t across regions on expectations of further price cuts. However, a few deals were concluded this week.

SteelMint assesses Bellary iron ore pellet (Fe 63%) prices at INR 11,400 as against last offers at INR 11,600-11,700/t assessed on 31 Aug'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.
  
  
• One deal was reported in this publishing window and considered as T1 for index calculation, given 50% weightage.
  
  
• Eleven (11) firm offers and indicative prices were reported. Four were from Raipur and the rest from outside the state capital. Six (06) were taken for price calculation and given a weightage of 50%.
  
  
• SteelMint received a single bid; however, it was not considered for calculation of the index.
  
  

Region-wise offers and deals: