SteelMint: PELLEX inches down after NMDC iron ore price revision

SteelMint's bi-weekly domestic pellet (Fe 63%) index, PELLEX, decreased marginally by INR 50/tonne (t) w-o-w to INR 8,950/t DAP Raipur on 18 July, 2023 as compared to the last assessment on 14 July. Deals of around 5,000 t were recorded at INR 8,950/t (Fe 63%) DAP in this publishing window.

India's largest merchant iron ore mining company, NMDC, has decreased list prices of iron ore by INR 200-300/t today, SteelMint learnt from reliable sources. Fixed prices of DR CLO (Fe 67%, 10-40mm) are at INR 6,270/t and those of iron ore fines (64%, - 10mm) are at INR 4,210/t (on FoR basis from Bacheli complex). Prices include royalty, DMF and NMET charges and are effective from today.

According to market participants, the price cut might not significantly affect pellet offers in Raipur. Most of the buyers restock raw materials before monsoon therefore they have enough stocks. However, they are in a wait-and-watch mode and closely looking at the market situation for any favourable conditions.

Rationale-

• PELLEX has been derived using data points, ie, trades, offers, and bids. To download the detailed methodology, Click here.
  
  
• One (1) deal was reported so far this week and taken into account for price calculation and hence accorded 50% weightage for T1 trade.
  
  
• Nine (9) firm offers, bids, and indicative prices were heard. Eight (8) were taken for price calculation and given the balance 50% weightage.
  
  

Godawari Power and Ispat Ltd (GPIL) has kept pellet (Fe 63.5% +/-0.5) offers stable at INR 9,200/t ($112/t) exw-Raipur. Other pellet players are offering in the range of INR 8,800-8,900/t exw.

Raipur P-DRI prices edge down w-o-w

SteelMint's price assessment of sponge P-DRI (FeM 80%) in Raipur decreased by INR 200/t w-o-w to INR 26,350/t exw on 18 July. Compared to the last trading day, prices edged up by INR 200/t d-o-d.

Billet prices continue to drop further w-o-w

Billet prices in Raipur fell by INR 250/t w-o-w to INR 41,100/t exw-Raipur on 18 July. On d-o-d basis, prices increased by INR 350/t. Prices recovered in the start of this week as a result of increasing spot buying supported by positive trends in the north Indian market. This resulted in an increase in daily transaction volumes. Trade volumes in the finished steel industry grew, resulting in higher demand for semi-finished steel.

The market is awaiting OMC's iron ore auction outcome. Odisha Mining Corporation (OMC) has scheduled an auction for 3.01 mnt of iron ore (2.15 mnt of fines and 0.86 mnt of lumps) on 20 Jul'23. OMC reduced the base price for fines by up to INR 750/t and that of lumps by INR 1,400-1,800/t compared to the auction held on 16 Jun'23.