SteelMint: PELLEX drops to over nine-month low in recent trade

SteelMint's bi-weekly domestic pellet (Fe 63%) index, PELLEX, moved down by a further INR 500/t to INR 11,300/t DAP Raipur on 7 Sept'21. A few deals for Fe 63% pellets were recorded by SteelMint during the current assessment period at around INR 11,000-11,500/t DAP Raipur.

A few Raipur-based buyers claimed to have booked 10,000 t of pellets from Odisha at INR 11,000/t DAP Raipur recently. However, confirmation could not be received till the time of publishing this report.

Raipur-based pellet makers have kept offers stable at INR 11,900-12,300/t exw. However, buyers indicated that discounts had been offered to the extent of INR 500-1,000/t on prevailing offers.

India's largest government-owned merchant iron ore miner, NMDC, has cut iron ore prices for Sept'21 deliveries by INR 1,000-1,160/t ($14-16/t), SteelMint learnt from sources.

A Jharsuguda-based producer has lowered offers to around INR 11,300/t exw. Pellet producers in Raigarh have cut offers by around INR 500/t to INR 11,500/t exw.

Sponge P-DRI (FeM 80%) prices in Raipur fell by INR 200/t to INR 29,400/t exw. Market participants have reported limited bids, while a couple of plants claimed that demand remained active for prompt deliveries, SteelMint reported.

Indian pellet market overview:

Indian pellet prices have been falling incessantly for the last few weeks and this week too prices plummeted sharply by around INR 250-1,000/t across regions on weak demand and low buying interest.

SteelMint assesses Bellary iron ore pellet (Fe 63%) prices at INR 11,200-11,300 against offers at INR 11,400/t on 3 Sept'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.
  
  
• A few deals were reported in this publishing window but only one was considered T1 for index calculation, given 50% weightage.
  
  
• Nine (09) firm offers and indicative prices were reported. Four were from Raipur and the rest from outside the state capital. Five (05) were taken for price calculation and given a weightage of 50%.
  
  
• SteelMint received no bids and therefore none were considered for calculation of the index.
  
  

Region-wise pellet offers and deals: