SteelMint: PELLEX increases by INR 150/t post-OMC iron ore auction

SteelMint's bi-weekly domestic pellets (Fe 63%) index, PELLEX, stood at INR 10,100/tonne (t) DAP Raipur, increasing by INR 150/t compared to the last assessment on 14 February, 2023. Around 25,000 t of deals were reported in this publishing window. Trade volumes improved this week in comparison to the previous week - which was rather subdued.

Rationale:

• PELLEX has been derived using data points, i.e. trades, offers and bids. To download the detailed methodology, Click here.
  
  
• Two deals were reported and only one was taken into consideration in this publishing window and accorded 50% weightage for T1 trade
  
  
• Eight (8) firm offers, bids and indicative prices were reported. Five (5) were taken for price calculation and given the balance 50% weightage.
  
  
• SteelMint received only two bids at INR 9,450-9,900/t DAP Raipur and only one was considered for index calculation in this publishing window.
  
  

Raipur-based pellets producers floated offers at INR 9,900-10,200/t ($120-123/t) exw from INR 10,100-10,200/t ($122-123/t) exw. Meanwhile, Godawari Power and Ispat offered pellets (Fe 63.5%, +/-0.5) at INR 10,200/t exw ($123/t) from INR 10,500/t exw ($127/t) on 16 January, 2023.

Eastern India-based pellets players already lifted offers sharply post-OMC auction conducted on 16 February. Prices of iron ore fines, the main component of pellet making, increased sharply. This in turn, pushed up prices of pellets.

Buyers are now showing interest in pellets and concluded some decent deals. However, some market participants were waiting for clarity and adopted a wait-and-watch mode today. Post-OMC auction, buyers are showing interest in prevailling pellets offers. However, in Raipur, some pellets makers closed sales but are expected to open their offers again next week.

At Odisha Mining Corporation's (OMC's) iron ore fines auction yesterday, 574,000 t were put up for auction and 5,59,000 t, or 97% of the total quantity received bids. The bid price for fines increased by up to INR 1,100/t against the last auction on 17 January, 2023. The company has raised bid prices by up to INR 1,100/t over base prices.

SteelMint's price assessment for sponge P-DRI (FeM 80%) in Raipur increased by INR 500/t w-o-w to INR 31,900/t exw. Sponge iron prices inched up by INR 100/t d-o-d.

Region-wise offers and deals: