SteelMint: PELLEX rises by INR 500/t on hike in sponge iron offers

SteelMint's bi-weekly domestic pellet (Fe 63%) index, PELLEX, stands at INR 10,450/tonne (t) DAP Raipur on 14 Dec'21, up by around INR 500/t against the last assessment on 10 Dec.

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 for around 12,000 t in this publishing window but only 10,000 t, concluded at INR 10,350/t DAP Raipur, was considered as T1 trade for calculation of the index and accorded 50% weightage. Another 2,000 t remained outside the purview of calculation as it was a small quantity.

  
  
  

• Five (5) firm offers and indicative prices were reported. Three (3) were taken for the price calculation and given 50% weightage.

  
  
  

• SteelMint received no bids for calculation of the index.
  
  

A major central India-based pellet maker increased offers today by around INR 500-600/t to INR 10,500/t exw. However, the other producers in Raipur either kept sales closed or held back offers. Sellers in Jharsuguda, Odisha increased offers further by around INR 200/t.

The sudden rise in pellet prices this week was due to a hike in finished steel prices. As per sources, buyers are looking for clarity from the market because of the sudden hike in prices across the steelmaking value chain. They are reluctant to take buying positions and are likely to observe the market for the next few days.

SteelMint's assessment for sponge iron, P-DRI (FeM 80%), rose sharply by INR 2,000/t to INR 29,000/t exw against INR 27,000/t last week. On a daily basis, prices edged up by INR 200/t on 14 Dec. Prices rallied following strong billet offers along with the spurt in domestic pellet offers. This prompted suppliers to keep sponge iron prices strong even though traded volumes fell today.

Indian pellet market overview: The Indian pellet market witnessed an uptrend across locations in the country, with prices rising by around INR 100-700/t.

Bellary iron ore pellet (Fe 63%) prices increased to INR 10,350/t as against INR 9,900/t on 10 Dec. Prices increased on rising sponge iron offers and firm finished steel prices.

Region-wise pellet offers and deals: