SteelMint: PELLEX falls further by INR 100/t on limited deals, awaits NMDC price revision

SteelMint's bi-weekly domestic pellet (Fe 63%) index, PELLEX, stood at INR 8,500/tonne (t) DAP Raipur on 3 June 2022, down by around INR 100/t compared to the last assessment on 31 May. The market is looking sluggish on weak demand. Not many deals were reported from eastern India after the ones concluded in the first half of the week.

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 and hence not taken into consideration in this publishing window and accorded 0% weightage for T1 trade.
  
  
• Thirteen (13) firm offers, bids and indicative prices were reported. Only nine (09) were taken for price calculation and given 100% weightage.
  
  
• SteelMint received one bids at around INR 8,150/t DAP Raipur, and considered it for the calculation of the index.
  
  

Raipur players kept the offers on hold. Godawari Power and Ispat Ltd's (GPIL's) was at INR 10,300/t exw ($133/t) and other Raipur-based pellet producers kept their offers stable at INR 9,900-10,000/t ($127-129/t) exw. However, one of the major pellet makers is still offering Fe 62.5% pellets at INR 8,500/t ($109/t).

A Jharsuguda-based pellet maker dropped its pellet offer to INR 7,800/t exw compared to the last offer of around INR 8,000/t exw.

As per sources, a sharp correction in Raipur pellet offers can be expected in the days to come as players are awaiting an iron ore price revision by NMDC which is expected anytime soon.

Pellet-based DRI (P-DRI, FeM 80%) prices in Raipur stood at INR 31,300/t exw, up INR 100/t w-o-w. On a daily basis, sponge iron prices increased by around INR 300/t.

Indian pellets market overview:

• India pellet offers fell across pellet-making regions by around INR 100-500/t following a fall in sponge and other semi-finished prices.
  
  
• Jindal SAW decreased pellet offers today. The current offer for Fe 63% pellets stands at INR 10,750/t ($139/t) DAP Kandla compared to offers of INR 11,250/t ($145/t) heard in end-May, 2022.
  
  
• Pellet (Fe 63%) prices in Durgapur decreased today to INR 8,000/t exw, down INR 500/t compared to the last assessment of INR 8,500/t on 31 May.
  
  

Regional offers and pellet deals: