SteelMint: PELLEX falls sharply as producers slash offers

SteelMint's bi-weekly domestic pellet (Fe 63%) index, PELLEX, has fallen sharply by INR 700/t to INR 11,650/t DAP Raipur on 12 Nov'21. This is the second time pellet makers in Raipur have cut offers sharply in the span of a week. Limited deals were reported in this publishing window.

Central India-based pellet makers slashed offers further today by INR 500-800/t for the domestic market, sources informed SteelMint. Current offers for pellet (Fe 63%) stand at INR 11,650-12,000/t exw-Raipur.

Sellers in Odisha's Jharsuguda have also reduced offers by around INR 600-700/t. However, market participants expect prices to fall further in the coming days.

Trade for pellets has almost dried up in the Raipur market. However, buyers are still not showing much interest in current offers and disparity between bids and offers prevails in the market.

SteelMint's assessment for sponge iron, P-DRI (FeM 80%), in Raipur fell by INR 2,900/t to INR 30,300/t exw on a w-o-w basis. On a daily basis, prices fell by INR 200/t.

Indian pellet market overview: Pellet markets across regions witnessed prices falling sharply in the range of INR 700-2,000/t on lack of trades. Indicative prices in western and eastern India fell today by up to INR 2,000/t.

Pellet prices in Durgapur have decreased, as per latest reports. SteelMint's current assessment for iron ore pellet (Fe 63%) stands at INR 10,500/t exw-Durgapur, down INR 1,400/t compared to the last assessment of INR 11,900/t on 9 Nov.

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 in this publishing window but not considered as T1 trade for calculation of the index; accorded no weightage.
  
  
• Eleven (11) firm offers and indicative prices were reported. Nine (09) were taken for price calculation and given 100% weightage.
  
  
• SteelMint received no bids in a falling market and therefore not considered for calculation of the index.