SteelMint: PELLEX rises by INR 100/t amid scarce inventory

SteelMint's bi-weekly domestic pellet (Fe 63%) index, PELLEX, increased by INR 100/t to INR 9,150/tonne (t) DAP Raipur on 14 August, 2023 as compared to the last assessment on 11 August. A deal of 17,000 t was recorded at INR 8,950- 9,100/t DAP in this publishing window. The index increased due to hike in pellet offers recently by manufacturers. As per sources, owing to lack of inventory an issue of dispatches occurred with the pellet makers.

However, market participants are waiting for NMDC's iron ore price revision which may lead to price clarity in the coming days.

Rationale:

• PELLEX has been derived using data points, i.e, trades, offers, and bids. To download the detailed methodology, Click here.
  
  
• Two deals were reported so far this week and only one was taken into account for price calculation and hence accorded a 50% weightage for T1 trade.
  
  
• Eight (8) firm offers, bids, and indicative prices were heard. Six (6) were taken for price calculation and given the balance 50% weightage.
  
  

Godawari Power and Ispat Ltd (GPIL) has increased pellet (Fe 63.5% +/-0.5) offers by INR 200/t ($2/t) to INR 9,400/t ($113/t) exw-Raipur, effective from 14 August, 2023. However, so far no deal has been recorded at the revised prices by the pellet maker. Other major pellet players have also hiked offers to INR 9,000-9,100/t ($108-109/t) exw.

Semi-finished and finished steel market overview in Raipur

• Raipur P-DRI prices fall w-o-w: SteelMint's price assessment of sponge P-DRI (FeM 80%) in Raipur decreased by INR 500/t w-o-w to INR 28,250/t exw on 14 August. Prices inched down by INR 100/t d-o-d. Demand was noticed at lower prices, resulting in an increase in trading activity.
  
  
• Raipur billet prices edge down w-o-w: Billet prices in Raipur inched down by INR 350/t w-o-w to INR 41,700/t exw-Raipur on 14 August. However, prices remained stable d-o-d.
  
  

Prices declined due to weak market sentiments and finished steel prices this week. Buying activity and lower-priced queries pushed suppliers to reduce their offerings today. Due to cautious buying and a poor steel market, material bookings have been limited.