SteelMint: PELLEX remains stable, buyers await NMDC price revision

SteelMint's bi-weekly domestic pellet (Fe 63%) index, PELLEX, remained unchanged at INR 9,050/t DAP Raipur on 8 August, 2023 as compared to the last assessment on 4 August. One deal of 1,500 tonnes (t) was recorded at INR 9,250/t (Fe 63%) DAP Raipur in this publishing window.

Market participants are waiting for NMDC's price revision. As per sources, buyers have sufficient pellet inventory for the coming days after aggressive bookings seen last week.

Rationale:

• PELLEX has been derived using data points, i.e, trades, offers, and bids. To download the detailed methodology, Click here.
  
  
• One (1) deal was reported so far this week but not taken into account for price calculation and hence accorded 0% weightage for T1 trade.
  
  
• Ten (10) firm offers, bids, and indicative prices were heard. Six (6) were taken for price calculation and given the balance 100% weightage.
  
  

Godawari Power and Ispat Ltd (GPIL) has kept pellet (Fe 63.5%, +/-0.5) offers stable at INR 9,200/t ($112/t) exw-Raipur. Other major pellet players have also kept offers stable at INR 8,800-9,200/t ($107-111/t) exw.

Some improvements in the prices of semi-finished and finished steel have supported pellet prices in the region. However, tight availability of iron ore lumps was seen in last month's rake movement due to higher loading rates amid the ongoing monsoon.

What factors resulted in firm pellet offers in Raipur?

• Raipur P-DRI prices up w-o-w: SteelMint's price assessment of sponge P-DRI (FeM 80%) in Raipur increased by INR 600-700/t w-o-w to INR 28,700/t exw on 8 August. However, prices remained largely stable d-o-d.
  
  
• Raipur billet prices edge up w-o-w: Billet prices in Raipur inched up by INR 150/t w-o-w to INR 41,950/t exw-Raipur on 8 August. However, prices decreased by INR 100/t d-o-d. Prices of billet increased as spot prices for semi-finished steel remained supported despite fluctuating sentiments and a slight increase in market activity and trading volumes.
  
  

Pellet prices may remain supportive in the upcoming days as the steel market is in uptrend and semi-finished material shortage is also an issue.