SteelMint: PELLEX remains range-bound amid subdued steel prices

SteelMint's bi-weekly domestic pellet (Fe 63%) index, PELLEX, inched down by INR 50/t to INR 9,000/t DAP Raipur on 4 July 2023, as compared to the last assessment on 30 June. Deals of 5,000 tonnes (t) were recorded at INR 9,050/t (Fe 63%) DAP Raipur in this publishing window.

Buyers are currently engaging in need-based procurement as semi-finished and finished steel prices decreased in the Raipur market. Market participants are waiting for NMDC's iron ore price revisions. As per market participants, buyers have sufficient stocks for the next few weeks. This is why demand for pellets is limited so far this week.

Rationale-

• PELLEX has been derived using data points, ie, trades, offers, and bids. To download the detailed methodology, Click here.
  
  
• One (1) deal was reported so far this week and was taken into account for price calculation and hence accorded 50% weightage for T1 trade.
  
  
• Nine (9) firm offers, bids, and indicative prices were heard. Eight (8) were taken for price calculation and given the balance 50% weightage.
  
  

Godawari Power and Ispat Ltd (GPIL) kept stable pellet (Fe 63.5% +/-0.5) offers at INR 9,200/t ($112/t) exw-Raipur. Other Raipur-based pellet players' offers were in the range of INR 8,800-8,900/t exw.

• Raipur P-DRI prices fall w-o-w: SteelMint's price assessment of sponge P-DRI (FeM 80%) in Raipur decreased by INR 400/t w-o-w to INR 26,700/t exw on 4 July. Prices fell by INR 150/t d-o-d. There was little demand for semi-finished and finished steel in the Raipur market since only need-based trade activity was noticed in major markets.
  
  
• Billet prices down w-o-w: Billet prices in Raipur decreased by INR 900/t w-o-w to INR 42,350/t exw-Raipur on 4 July. This decline in the price is attributed to weak performance in the finished steel sector across the country, leading to reduced demand for billets. The last time the prevalent billet offers were observed was in the first week of December 2022, which indicates a protracted period of low demand.