SteelMint: PELLEX range-bound in recent deals, market quiet after NMDC price cut

SteelMint's bi-weekly domestic pellet (Fe 63%) index, PELLEX, stands at INR 10,650/tonne (t) DAP Raipur on 28 Dec'21, up marginally by around INR 50/t against the last assessment on 24 Dec'21. Around 33,000 t of deals were reported in this publishing window.

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.
  
  
• Three (03) deals were reported in this publishing window at INR 10,550/t DAP Raipur Out of which 2 were considered as T1 trade for calculation of the index and accorded 50% weightage.
  
  
• Four (04) firm offers and indicative prices were reported. Three (03) were taken for price calculation and given 50% weightage.
  
  
• SteelMint received no bids hence not considered for calculation of the index.
  
  

Central India-based pellet-makers kept offers stable at INR 10,700-11,000/t exw. Price indications in Jharsuguda, Odisha are at INR 10,000/t exw, up by INR 200/t against 24 Dec'21.

As per market sources, demand for pellets is low at increased offers as the buyers interest is very limited. It is likely that buyers might shift to DR-CLO or increase the usage of lumps.

NMDC iron ore fines prices hit over 1-year low: PSU miner NMDC has cut iron ore prices by INR 300-500/tonne (t) for Jan'22 deliveries, SteelMint learnt from sources. Fines prices have witnessed a comparatively sharper correction than lumps. After today's price cut, the miner's fines offer has hit over a one year low.

Pellet sponge prices hit a one-year high yesterday but today, SteelMint's assessment for pellet-based DRI (P-DRI) fell by INR 400/t to INR 30,800/t exw-Raipur for FeM 80% material. However, on a w-o-w basis, prices rose by INR 2,300/t against last week prices at INR 28,500/t exw-Raipur.

Indian pellet market overview: The Indian pellet market witnessed an uptrend in prices across locations except Durgapur where prices fell by around INR 200/t.

Active sales of 125,000 t of pellets (Fe 63%) were recorded from Barbil at INR 9,000-9,200/t, loaded on to wagon, earlier this week. SteelMint's assessment for Barbil iron ore pellets (Fe 63%) currently stands at INR 9,350/t loaded on to wagon, up INR 200/t.