SteelMint: PELLEX remains stable while buyers wait for further drop in prices

SteelMint's bi-weekly domestic pellet (Fe 63%) index, PELLEX, remained stable at INR 11,300/t DAP Raipur on 10 Sept'21. Around 25,000 t of deals for Fe 62.5/63% pellets were recorded by SteelMint at around INR 11,350-11,550/t DAP Raipur during the current assessment period.

A couple of Raipur-based pellet players slashed offers yesterday by INR 500-600/t after deals from an Odisha-based player was concluded at INR 11,500/t DAP Raipur towards the beginning of this week. Current offers for Fe 63% pellets are being quoted at INR 11,400-11,700/t exw-Raipur.

However, buyers are still bidding lower than the prevailing offer, considering the decline in pellet export realisations. SteelMint's pellet export index (Fe 64%, 3% Al, FoB east coast) declined $4/t, w-o-w, and currently stands at $132/t. The index has fallen to a 10-month low, as per SteelMint data.

A Jharsuguda-based producer has lowered offers to INR 11,000/t exw. Pellet producers in Raigarh have also cut offers by around INR 200/t to INR 11,300/t exw.

Sponge P-DRI (FeM 80%) prices in Raipur have moved up by INR 300/t to INR 29,400/t exw on a daily basis. However, on a weekly basis, prices have moved down by INR 400/t.

Indian pellet market overview:

Indian pellet prices have seen a sharp decline towards the closing of this week across markets in the range of INR 100-1,000/t with eastern India witnessing the most significant drop.

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 in this publishing window but only one was considered 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. Three (03) were taken for price calculation and given a weightage of 50%.
  
  
• SteelMint received two bids out of which one bid was considered for calculation of the index.