SteelMint: PELLEX remains stable post-active deals last week

SteelMint's bi-weekly domestic pellet (Fe 63%) index, PELLEX, remained stable at INR 9,300/t DAP Raipur on 18 April 2023 compared to the previous assessment on 14 April. No deal was concluded as market participants were waiting for a clearer market direction post-OMC's iron ore auction conducted today. Also, most of the sponge players had concluded active pellet bookings last week owing to which deals have remained slow this week.

At OMC's auction, 645,000 t of iron ore fines (Fe54-64%) were offered, out of which 252,000 t were booked at INR 2,500-6,400/t ex-mines and the rest remained unsold. However, due to the drop in PELLEX Raipur (INR 600/t m-o-m), and Barbil pellet prices (by INR 200/t m-o-m), buyers showed less interest at this auction.

However, the lumps auction received a good response and around 430,000 t or 83% of the material received bids against 515,000 t put up for auction. As per sources, bids were received for different mines in the range of INR 6,150-10,000/t.

Rationale:

• PELLEX has been derived using data points, i.e. trades, offers and bids. To download the detailed methodology, Click here.
  
  
• No deal was reported so far this week and therefore none were taken into account for price calculation and accorded 0% weightage for T1 trade.
  
  
• Twelve (12) firm offers, bids and indicative prices were heard. Nine (9) were taken for price calculation and given the balance 100% weightage.
  
  
• Two (2) bids were received and all were taken into account for price calculation.
  
  

Raipur-based pellet producers offered the Fe 63-63.5% grade at INR 9,400-9,800/t ($115-120/t) exw. However, no deals were concluded in this publishing window.

Steel prices have been fluctuating widely, making it difficult for buyers to get clarity on the price front. Buyers are mostly procuring material only as per their immediate requirements, and they had also concluded sufficient deals last week which led to trades becoming silent this week so far.

SteelMint's price assessment for sponge P-DRI (FeM 80%) in Raipur increased by INR 550/t w-o-w to INR 30,500/t exw.However, prices remained stable d-o-d.

Region-wise offers and deals: