SteelMint: PELLEX remains stable in recent deals even as bids keep falling

SteelMint's bi-weekly domestic pellet (Fe 63%) index, PELLEX, remained stable at INR 11,100/t DAP Raipur on 17 Sep'21. A few deals for Fe 63% pellets were recorded by SteelMint during the current assessment period.

Raipur-based pellet players kept offers stable at INR 11,400-11,700/t exw for this week. However, there disparity between offers and bids in the market. As per sources, bids are still lower by around INR 400-500/t against the prevailing offers in Raipur.

As per sources, Raipur buyers bought pellets from Kharagpur at INR 11,000/t FOR Raipur recently. Competitive prices from other states are keeping Raipur pellet offers under pressure.

On the other hand, Raipur buyers are still reluctant to buy at current offers and are bidding at around INR 400-500/t lower considering the decline in pellet export realisations and with the expectation that offers will weaken further.

Jharsuguda- and Raigarh-based producers have kept their offers stable at INR 11,000/t exw.

Sponge iron prices remained strong in Raipur despite falling billet prices on 16 Sep'21. Producers kept offers stable in line with sufficient orders. SteelMint's assessment for sponge P-DRI dropped by INR 100/t to INR 30,200/t exw, due to lack of trades today. On a weekly basis, prices have moved up by INR 800/t.

Indian pellet market overview:

Indian pellet prices have stabilised after continuous decline in prices for the past couple of weeks except in the Barbil region in Karnataka.

Barbil pellet prices have inched down. SteelMint's current assessment for iron ore pellet (Fe 63%) stands at INR 10,100/t loaded on to wagon, down INR 600/t compared to the last assessment of INR 10,700/t on 14 Sep.

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.
  
  
• Two deals were reported totalling around 14,000 t but only one deal was considered in this publishing window as T1 for index calculation, being given 50% weightage.
  
  
• Eleven (11) firm offers and indicative prices were reported. Four were from Raipur and the rest from outside the state capital. Two (02) were taken for price calculation and given a weightage of 50%.
  
  
• SteelMint received two bids and both were considered for calculation of the index.
  
  

Region-wise pellet offers and deals: