SteelMint: PELLEX inches down by INR 300/t as Raipur players cut prices

SteelMint's bi-weekly domestic pellet (Fe 63%) index, PELLEX, stood at INR 13,600/tonne (t) DAP Raipur on 29 Mar'22, down around INR 300/t compared with the last assessment on 25 Mar'22. Limited deals were heard in this publishing window despite a drop in offers announced yesterday.

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 8,000 t at INR 13,500/t exw, which was taken into consideration in this publishing window; likewise, accorded 50% weightage.
  
  
• Nine (09) firm offers, bids and indicative prices were reported. Six (06) were taken for price calculation and given 50% weightage.
  
  
• SteelMint has received three bids but considered only one bid for calculating the index.
  
  

Raipur-based pellet producers decreased their offers by INR 700-1,000/t ($9-13/t) yesterday. The current offer for Fe 64/63% pellets stand at INR 13,500-13,800/t ($177-181/t) exw, down from INR 14,500/t ($191-192/t) on 25 Mar'22. Meanwhile, Godawari Power and Ispat Ltd (GPIL) has cut offers by INR 700/t ($9/t) to INR 13,800/t ($181/t) exw. Weak demand on declining sponge iron prices resulted in the drop in pellet offers, SteelMint notes.

Jharsuguda-based pellet makers also cut offer by around INR 700/t to INR 13,000/t exw from the last offer at INR 13,700/t exw. However, no deals have been reported yet.

Buyers are still away from the market as they are bidding quite lower than the revised offer prevailing in the market. The gaps are much wider between offers and bids. Sponge makers are much anxious for increased coal and pellet offers. Therefore, they are reluctant to take any buying decision.

At the same, NMDC's price revision is around the corner and expected to be out shortly.

Pellets-based DRI (P-DRI, FeM 80%) prices in Raipur decreased to INR 38,300/t exw down around INR 3,700/t w-o-w. On a daily basis, sponge iron prices were down around INR 700/t and in the last two days prices have fallen sharply by around INR 1,600/t.

Indian pellets market overview: Domestic pellets prices are down sharply by around INR 600-850/t across regions except in western India where prices have remained stable over the last few weeks.

• Iron ore pellet (Fe 63%) prices in Bellary inched down to INR 10,500/t exw today against INR 10,800/t on 25 March, as per SteelMint's assessment.
  
  
• Deals for 21,000 t were confirmed in this publishing window at around INR 10,200-10,500/t exw.Pellet prices in Durgapur decreased today, as per SteelMint's assessment. The current assessment for pellets (Fe 63%) stands at INR 11,000/t exw Durgapur, down INR 600/t compared to the last assessment of INR 11,600/t on 25 Mar'22.
  
  

Region-wise pellets offers and deals: