SteelMint: PELLEX slides in Jul'21 even as traded volumes rise

PELLEX, SteelMint's bi-weekly iron ore pellet (Fe 63%) index for the key central Indian market of Raipur, recorded total traded quantity at 71,000 t in Jul'21 compared to about 30,000 t in the preceding month, a rise of over 135% m-o-m.

However, SteelMint data shows that traded volumes in Jul were still lower in comparison with 85,000 t in May and 163,000 t in Apr'21.

Pellet prices in Chhattisgarh came under pressure due to India's leading iron ore miner NMDC reducing prices in the beginning of Jul followed by weakening of bids at OMC's iron ore lump auction. While Raipur producers kept offers firm throughout the month, bid-offer disparities kept purchasers at bay.

Raipur-based pellet producer, Jayaswal Neco, had cut offers by around INR 1,400/t to INR 14,600/t exw in mid-July.

Some pellet producers from Raipur opted for maintenance shutdowns during the month even as export prices came under pressure due to bearish sentiments around steel production curbs in China. A couple of export tenders floated around end-Jul received poor response. Other pellet makers remained out of the domestic market due to previous export commitments.

SteelMint's benchmark P-DRI (FeM 80%) prices for Raipur rose by INR 600/t w-o-w to INR 30,300/t exw on 30 Jul. Sponge iron prices moved up on positive sentiments in the billets market although, except for resumption of activities in the projects segment, long steel prices are expected to remain depressed due to seasonal factors.

However, surging export opportunities could keep primary long steel prices elevated. Depressed traded volumes kept the weighted average price of Raipur pellets at INR 15,300/t in Jul vis-a-vis INR 16,100/t in Jun, as assessed by SteelMint.

PELLEX:

PELLEX monitors the dynamics of India's largest merchant pellet market - Raipur. Along with recording sales and offers from Raipur-based producers, the index also tracks deals concluded by pellet producers based in other major markets of the country - Odisha, Karnataka and western India - for sponge iron manufacturers in Raipur. It is a mathematically precise index aiming to provide accurate price assessment for traders.