SteelMint: PELLEX falls INR 600/t on cheaper offers from other regions

SteelMint's bi-weekly domestic pellet (Fe 63%) index, PELLEX, stood at INR 13,000/tonne (t) DAP Raipur on 1 Apr'22, down INR 600/t compared with the last assessment on 29 March.

Around 2,000 t of deals were heard in this publishing window from Odisha-based pellet producers concluded at INR 12,600/t DAP Raipur in the last couple of days. However, with the hike in sponge iron prices today, producers reportedly raised offers.

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 for 2,000 t at INR 12,600/t exw, but not taken into consideration in this publishing window as it did not fall under SteelMint methodology. Hence accorded no weightage for T1 trade.
  
  
• Eleven (11) firm offers, bids and indicative prices were reported. Seven (7) were taken for price calculation and given 100% weightage.
  
  
• SteelMint received four bids but considered only two bids for calculation of the index.
  
  

Raipur-based pellet producers kept their offers stable today but no deal heard so far. The current offer for Fe 64/63% pellet stands at INR 13,500-13,800/t ($177-181/t) exw.

"However, prevailing offers are still not attracting any deal and market participants expect some more price cuts in the coming days," a source indicated.

Jharsuguda-based producers, too, slashed offers by around INR 500/t to INR 12,500/t exw compared with the last offer at INR 13,000/t exw. SteelMint heard that they concluded one deal for a small quantity of around 2,000 t at INR 11,800/t exw recently.

Buyers are still away from the market as the gap is getting wider between offers and bids. However, they are looking to procure pellets from the outside state at a reasonable rate.

On the other hand, India's largest merchant iron ore miner NMDC has raised iron ore list prices by up to INR 200/t today for April deliveries. The revised offers are: DR CLO (10-40mm, Fe 67%) - INR 7,320/t; and Baila fines (Fe 64%) - INR 5,160/t. Prices are on FOR basis, excluding royalty and taxes. Notably, royalty rates for Jan have come down compared with Dec'21.

Pellets-based DRI (P-DRI, FeM 80%) prices in Raipur decreased to INR 38,200/t exw down around INR 1,800/t w-o-w. However, on a daily basis, sponge iron prices up at around INR 800/t.

Indian pellets market overview: Domestic pellets prices are down further by around INR 100-1,550/t across regions except in western India and Durgapur where prices have remained stable this week so far.

• Iron ore pellet (Fe 63%) prices in Bellary inched down to INR 10,100/t exw today against INR 10,500/t on 29 March, as per SteelMint's assessment.
  
  
• 50,000 t deals were confirmed in this publishing window at around INR 10,000-10,200/t exw.
  
  
• Pellet producers in Bellary have actively concluded deals to Gujarat-based plants at INR 12,600-12,900 DAP Kandla.
  
  

Region-wise pellets offers and deals: