SteelMint: PELLEX remains largely range-bound, trades limited

SteelMint's bi-weekly domestic pellet (Fe 63%) index, PELLEX, stands at INR 12,150/tonne (t) DAP Raipur on 04 Feb'22, down INR 50/t against the last assessment on 1 Feb. No deal has been reported from Raipur 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.
  
  
• No deal was reported and therefore not considered in this publishing window as T1 trades for calculation of the index; accorded no weightage.
  
  
• Nine (09) firm offers, bids and indicative prices were reported. All were taken for price calculation and given 100% weightage.
  
  
• SteelMint received two (02) bids and all were considered for calculation of the index.
  
  

A pellet-maker has lowered domestic offers by INR 500/t to INR 12,000/t exw from INR 12,500/t exw on no firm buying interest at last offers. Other producers in Raipur have also kept offers around INR 12,000-12,300/t exw, alhough a few central India-based pellet-makers have announced maintenance for the next 10 days.

Jharsuguda, Odisha-based pellet producers are also not offering pellets in the market due to the maintenance schedule for the next 10-15 days.

Buyers, on the other hand, are still not interested therefore led the pellet demand low in the market at prevailing offers. Coal offers are making the sponge maker reluctant for any buying decisions at high price.

In a confirmed deal, 5,000 t of South African RB2 (5500 NAR) coal was sold at INR 15,400/t at Gangavaram Port. With pre-booked cargoes coming in, several traders were heard offering index-based prices for Mar'22 vessel arrivals. Demand from sponge iron manufacturers has picked up amid low domestic coal supplies.

Pellet-based DRI (P-DRI, FeM 80%) prices in Raipur rose further by INR 300/t w-o-w to INR 34,800/t compared to last week's offers. On a daily basis, prices up by INR 200/t.

Indian pellet market overview: Domestic pellet prices given the mixed response across the regions on hike in sponge and coal prices amid lower trade.

Pellet prices in Durgapur have increased, as per latest reports. SteelMint's current assessment for iron ore pellet (Fe 63%) stands at INR 11,400/t exw-Durgapur, up INR 650/t compared to the last assessment of INR 10,750/t on 1 Feb'22. Also, deals of around 16,000 t were heard concluded recently at INR 11,000-11,300/t exw.

Region-wise pellet offers and deals: