SteelMint: PELLEX remains stable in recent trades

SteelMint's bi-weekly domestic pellet index "PELLEX" remained stable today (16th Oct'20) at INR 8,550/t, DAP Raipur. Deals for 10,000 t pellets have been concluded by Raipur based pellet makers in this publishing window. Raipur-based Jayaswal Neco's 1.2 mn t pa pellet plant has gone for a 15-day maintenance shut-down last week. Prices are expected to stay firm.

On a daily basis pellet sponge (P-DRI) prices have come down around INR 200/t to INR 19,600/t exw Raipur.

Market overview - Pellet prices in Bellary have increased by INR 300-400/t owing to tight supply as one of the pellet makers is undergoing maintenance shutdown. Also, a few market participants highlighted decent trades being concluded by Durgapur-based pellet makers in the last few days at around INR 7,500-7,600/t (exw).

Rationale - PELLEX has been derived using five data points: i.e trades, offers, bids, substitute parity, and export realizations. You can download the detailed methodology by clicking on this link Click here.

• Deals for 10,000 t pellets have been concluded by Raipur based pellet makers in this publishing window at INR 8,550/t (DAP Raipur). The transaction was taken into consideration for price calculation and given weightage given 80%.
  
  
• Two firm offers were reported this week at INR 8,550/t (DAP, Raipur) and the rest three from outside Raipur at INR 8,650-8,750/t (DAP, Raipur) which have been given a weightage of 20%.
  
  
• No firm bid has been reported in this publishing window and given a weightage of 0%.
  
  
• SteelMint calculated the price at which Raipur pellet can displace NMDC lump in the sponge rotary kiln feed (substitute parity) on a DAP Raipur basis at INR 7,750/t and given a weightage of 0%.
  
  
• The export realization factor has not been considered as pellet makers are less active in exports owing to an increased domestic realization.
  
  

Calculation of Index:

Source-: SteelMint

Region-wise pellet deals and offers: