SteelMint: PELLEX hits one-year low as producers lower offers

SteelMint's bi-weekly domestic pellet (Fe 63%) index, PELLEX, has fallen sharply to INR 9,650/t DAP Raipur on 30 Nov'21, lower by INR 700/t against the last assessment of INR 10,350/t on 26 Nov. PELLEX has dropped to one-year low as same levels were last seen in Nov'20.

In the past week, pellet producers from Raipur cut offers by around INR 1,500/t as part of two successive revisions. Central India-based pellet makers decreased offers by INR 1,000/t today. Current offers stand at INR 9,500-9,800/t exw-Raipur. Sellers in Odisha's Jharsuguda kept offers stable but may cuts offers soon.

Confirmed deals of around 6,000-7,000 t were reported at around INR 9,450/t DAP Raipur.

Earlier today, NMDC cut iron ore prices by INR 200-870/t for Dec'21 deliveries. Lumps prices witnessed a comparatively sharper correction than fines. After today's price cut, the miner's lump offers have hit an eight-month low.

However, sponge iron prices are yet to witness a correction. SteelMint's assessment for sponge iron, P-DRI (FeM 80%), in Raipur stood at INR 28,900/t exw, down marginally by around INR 100/t against last week as well as on a daily basis.

Indian pellet market overview: Regional pellet markets witnessed a drop in prices in the range of INR 100-1,000/t. However, prices in western and southern India remain stable.

Iron ore pellet (Fe 63%) prices in Bellary are recorded as stable at INR 10,400-10,500/t compared to last 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.
  
  
• One deal was reported, around 6,500 t, in this publishing window hence considered as T1 trade for calculation of the index; accorded 50% weightage.
  
  
• Nine (09) firm offers and indicative prices were reported. Seven (07) were taken for price calculation and given 50% weightage.
  
  
• SteelMint received no bids for calculation of index.
  
  

Region-wise pellet offers and deals: