SteelMint: PELLEX inches up by INR 150/t on supply concerns

SteelMint's bi-weekly domestic pellet (Fe 63%) index, PELLEX, increased by INR 150/t to INR 9,150/t DAP Raipur on 19 May, 2023 as compared to the previous assessment on 16 May. Around 13,900 t of deals were recorded at INR 9,150/t 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.
  
  
• Two (2) deals were reported so far this week and taken into account for price calculation and hence accorded 50% weightage for T1 trade.
  
  
• Five (5) firm offers, bids and indicative prices were heard. Four (4) were taken for price calculation and given the balance 50% weightage.
  
  

Few pellet makers in Raipur have under taken maintenance shutdowns at their plants, resulting in the supply shortage in the market. Current offer for Fe 63% pellets stands at INR 9,000-9,200/t exw. However, buyers are expecting a price cut in iron ore in the upcoming days.

Also, the OMC's auction that was conducted on 18 May from Jilling mines received a poor response as buyers didn't show interest. Only 16,000 t (Fe55-58%) - out of 746,000 t of iron ore fines (Fe54-64%) auctioned - were booked at the base price of INR 2,500/t. SteelMint noted that a decline in pellet prices, squeezed margins, and a drop in exports could be the reasons behind less active participation.

SteelMint's assessment for sponge P-DRI (FeM 80%) in Raipur increased by INR 400/t w-o-w to INR 29,450/t exw. However, prices inched down by INR 100/t d-o-d.