SteelMint: PELLEX inches up by INR 150/t in recent deals

SteelMint's bi-weekly domestic pellet (Fe 63%) index, PELLEX, increased by INR 150/tonne (t) to INR 9,050/t DAP Raipur on 4 August, 2023 as compared to the last assessment on 1 August. Deals of 35,000 tonnes (t) were recorded at INR 9,050-9,150/t (Fe 63%) DAP Raipur in this publishing window.

Rationale:

• PELLEX has been derived using data points, i.e, trades, offers, and bids. To download the detailed methodology, Click here.
  
  
• Three (3) deals were reported so far this week and two were taken into account for price calculation and hence accorded a 50% weightage for T1 trade.
  
  
• Twelve (12) firm offers, bids, and indicative prices were heard. Nine (9) 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 major pellet players have also kept offers stable at INR 8,800-8,900/t ($107-108/t) exw. However, one of the prominent pellet makers has hiked pellet offers by INR 200/t to INR 9,200/t exw today.

Amid tight availability of iron ore lumps in the market, pellet demand increased in this rainy season. On the other hand, hike in semi-finished and sponge prices also pushed up pellet prices.

What factors have resulted in a rise in pellet offers in Raipur?

• Raipur P-DRI prices up w-o-w: SteelMint's price assessment of sponge P-DRI (FeM 80%) in Raipur increased significantly by INR 1,700-1,800/t w-o-w to INR 28,700/t exw on 4 August. However, prices inched down by INR 100/t d-o-d on 4 August.
  
  
• Raipur billet prices increase w-o-w: Billet prices in Raipur sharply improved by INR 1,200/t w-o-w to INR 41,950/t exw-Raipur on 4 August. However, prices decreased by INR 350/t d-o-d.
  
  

Sponge iron and billet prices increased sharply in the last one week due to seasonal effect that led to slower production activities and created material shortage in the market. However, handling raw material in the monsoon is also a challenge for steelmakers. As per the current market scenario, pellet prices may remain supportive in the coming days.