SteelMint: PELLEX falls by INR 150/t on competitive offers, falling bids

SteelMint's bi-weekly domestic pellet (Fe 63%) index, PELLEX, fell by INR 150/t to INR 10,900/t DAP Raipur on 28 Sep'21. No deal was recorded by SteelMint during this assessment period.

However, competitive offers from other states to Raipur kept prices under pressure. SteelMint came to learn that an Odisha-based producer offered pellets to Raipur at INR 10,700/t on FOR basis, while offers from nearby regions were heard at INR 10,500/t DAP Raipur.

Raipur-based pellet players kept offers stable at INR 11,400-11,700/t exw for this week too. However, almost no buying interest was observed at these levels.

Jharsuguda-based producers also kept offers stable at INR 10,500/t exw. But a Raigarh-based pellet maker decreased offers further by INR 200/t to INR 10,600/t exw.

Buyers are awaiting NMDC's price revision for Oct before planning further purchases. State-owned miner Odisha Mining Corporation (OMC) has scheduled iron ore lumps and fines e-auctions on 1 Oct. About 781,000 t of iron ore lumps and 942,000 t of fines will be put up for auction. For lumps, in the upcoming auction, the miner has reduced the base price by up to INR 4,100/t as against the base price in the auction held on 31 Aug.

SteelMint's assessment for Raipur sponge P-DRI (FeM 80%) rose by INR 300/t to INR 30,800/t exw. Active demand on rising billet prices and a positive outlook continued to support sponge prices across locations. On a weekly basis, prices have moved up by INR 200/t.

Indian pellets market overview:

Indian pellet prices stayed mostly stable across regions in this publishing window except Bellary and Kandla.

Bellary iron ore pellet (Fe 63%) prices fell to INR 10,900/t as against at INR 11,300/t on 24 Sep, as per SteelMint assessment.

Jindal SAW Ltd. has decreased pellet offers further by INR 1,000/t ($14) on 26 Sep. The current offer for Fe 63% pellet stands at INR 11,500/t DAP Kandla.

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.
  
  
• No deal was reported therefore no T1 trade was factored in for the index calculation, given 0% weightage.
  
  
• Thirteen (13) 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 100%.
  
  
• SteelMint also received three bids at INR 10,000-10,850/t DAP Raipur but only two were considered for calculation of the index.
  
  

Region-wise pellet offers and deals: