SteelMint: PELLEX falls INR 200/t while buyers expect further price correction

SteelMint's bi-weekly domestic pellet (Fe 63%) index, PELLEX, drifted down by INR 200/t to INR 11,100/t DAP Raipur on 14 Sept'21. Around 19,000 t of deals for Fe 63% pellets were recorded by SteelMint at around INR 11,150-11,550/t DAP Raipur during the current assessment period.

Raipur-based pellet players kept offers stable at INR 11,400-11,700/t for this week. However, there is disparity between offers and bids in the market. As per the sources, bids are lower than prevailing offers by pellet makers.

However, buyers are still bidding low considering the decline in pellet export realisations and expect offers to weaken further in the coming days.

A Jharsuguda-based producer has kept offers stable at INR 11,000/t exw. However, pellet producers in Raigarh have cut offers by around INR 100/t to INR 11,100-11,200/t exw.

Pellet sponge demand remains active. However, trade volumes fell slightly despite a rally in billet prices by INR 300/t. SteelMint's assessment for sponge P-DRI (FeM 80%) rose by INR 100/t d-o-d to INR 29,800/t exw. On a weekly basis, prices have moved down by INR 400/t.

Indian pellet market overview:

Indian pellet prices have witnessed a continuous decline this week in the range of INR 100-750/t across regions except south India's Bellary market.

Barbil pellet prices have inched down. SteelMint's current assessment for iron ore pellet (Fe 63%) in Barbil stands at INR 10,700/t loaded on to wagon, down INR 200/t compared to the last assessment of INR 10,900/t on 10 Sept.

SteelMint assesses Bellary iron ore pellet (Fe 63%) prices at INR 11,400-11,500/t against INR 11,000/t reported on 10 Sept. Pellet prices have increased amid sharp hike in sponge iron offers in Bellary.

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.
  
  
• Around 19,000 t deals were reported in this publishing window. All were considered as T1 for index calculation, being given 50% weightage.
  
  
• Eleven (09) firm offers and indicative prices were reported. Four were from Raipur and the rest from outside the state capital. Two (02) were taken for price calculation and given a weightage of 50%.
  
  
• SteelMint received two bids and both were considered for calculation of the index.
  
  

Region-wise pellet offers and deals :