SteelMint: PELLEX remains stable in fresh deals; restocking may gain momentum

SteelMint's bi-weekly domestic pellet (Fe 63%) index, PELLEX, remained stable at INR 9,100/t DAP Raipur on 23 June, 2023, as compared to the last assessment on 20 June. Deals of 20,000 tonnes (t) were recorded at INR 9,150-9,350/t (Fe 63%) DAP Raipur in this publishing window. A deal of 30,000 t pellet (Fe66%) was recorded at INR 11,200/t exw in the last two days.

Rationale-

• PELLEX has been derived using data points, ie, trades, offers, and bids. To download the detailed methodology, Click here.
  
  
• Two (2) deals were reported so far this week and both were taken into account for price calculation and hence accorded 50% weightage for T1 trade.
  
  
• Eight (8) firm offers, bids, and indicative prices were heard. Seven (7) were taken for price calculation and given the balance 50% weightage.
  
  

Godawari Power and Ispat Ltd (GPIL) has opened pellet (Fe 63.5% +/-0.5) offers at INR 9,200/t ($112/t) exw-Raipur. Other Raipur-based pellet players have kept offers unchanged and are offering at INR 8,900-9,200/t exw. As per sources, the approaching monsoon has increased the pace of restocking of raw materials among buyers.

As per sources, a deal from Jamshedpur was heard concluded for around 15,000 t at INR 9,200/t FOR to a destination close to Raipur in this publishing window so far.

• Raipur P-DRI prices down w-o-w: SteelMint's price assessment of sponge P-DRI (FeM 80%) in Raipur decreased by INR 700/t w-o-w to INR 27,200/t exw on 23 June. However, prices remained stable d-o-d. The steel market is exhibiting indications of a slowdown, with limited activity observed in major markets. While scrap demand has remained moderate, mills are operating at reduced production capacity.
  
  
• Billet prices down: Billet prices in Raipur decreased by INR 650/t to INR 43,450/t exw-Raipur on 23 June. Sales of finished steel have been modest, and steel manufacturers are optimistic about potential price improvements in the coming week.
  
  

Market participants are awaiting NMDC's iron ore price announcement, which is expected in the coming days, for attaining clarity in prices.