SteelMint: PELLEX increases marginally, limited trades reported

SteelMint's bi-weekly domestic pellet index "PELLEX" has increased marginally by INR 50/t to INR 11,600/t DAP Raipur, today (01st Dec'20). One confirmed deal for 5,000 t has been reported for Raipur market in this publishing window.

Pellet makers in Raipur have kept the offers unchanged at INR 11,500/t (ex-plant). However, offers from Jharsuguda increased around INR 100-200/t in the last few days.

Market participants in central India are awaiting NMDC's iron ore price revision which is expected this week. Trade sources expect an upward revision.

On the other hand, Odisha's leading miner - Odisha Mining Corp (OMC) has scheduled its next iron ore e-auction on 2nd Dec'20 for 910,000 t iron ore lump. JSW Steel has scheduled an auction for 300,000 t iron ore (run of mines) from its Nuagaon and Jajang mines in Odisha on 10 Dec'20.

Pellet sponge (P-DRI) prices have also increased by around INR 550/t w-o-w to INR 24,900/t exw, Raipur.

Rationale - PELLEX has been derived using five data points: i.e trades, offers, bids, substitute parity, and export realizations. You can download the detailed methodology by clicking on this link Click here.

• One pellet deal has been concluded for 5,000 t at INR 11,550-11,650/t (DAP, Raipur) in this publishing window therefore it was considered for price calculation and weightage given 80%.
  
  
• Five firm offers were reported this week and only four offers were taken for price calculation at INR 11,650/t (DAP, Raipur) and the rest four from outside Raipur at INR 11,150-11,450/t (DAP, Raipur) and given a weightage of 20%.
  
  
• No firm bids reported and not considered in price calculation in this publishing window, and given a weightage of 0%.
  
  
• SteelMint calculated the price at which Raipur pellet can displace NMDC lump in the sponge rotary kiln feed (substitute parity) on a DAP Raipur basis at INR 9,100/t and given a weightage of 0%.
  
  
• The export realization factor has not been considered as pellet makers are less active in exports owing to an increased domestic realization.
  
  

Calculation of Index:

Source-: SteelMint

Region-wise pellet deals and offers: