SteelMint: PELLEX slips INR 350/t as offers fall, market awaits NMDC price revision

SteelMint's bi-weekly domestic pellet index, PELLEX, decreased by INR 350/t to INR 14,400/t DAP Raipur on 03 Aug'21. A couple of Raipur-based pellet producers decreased pellet offers in this publishing window. Current offers from Raipur-based players stand at INR 14,200-14,500/t exw, SteelMint learnt from sources.

Central India-based steelmaker, Godawari Power and Ispat Ltd (GPIL), has reduced offers by around INR 500/t. Jharsuguda and Raigarh-based producers have kept the offers stable at INR 14,600-14,800/t exw.

State-owned commercial mining company, Odisha Mining Corporation's (OMC), e-auction for iron ore lumps on 31 Jul'21 received moderate participation, with 507,000 t of iron ore, or 74% of 687,000 t of material on offer, getting booked. The bids in the auction edged lower compared with the last auction held on 2 June'21.

Followed this Odisha-based merchant iron ore miner, Rungta Sons Pvt Ltd and Essel mining have slashed iron ore fines prices by INR 1,000/t ($13) recently.

Raipur based players are waiting for NMDC's price revision before placing orders for pellets, quoted a local source.

SteelMint's benchmark pellet sponge (P-DRI, FeM 80%) prices rose by INR 1,000/t w-o-w to INR 30,800/t exw Raipur on 3 Aug'21. However, on a daily basis, P-DRI prices decreased by around INR 100/t. Sponge iron prices remained strong across markets, even though steel billet prices declined in today's trade.

Indian pellet market overview-: The pellet market across regions exhibited mixed response on the based on local market selling. However, most of the market remained firm today.

SteelMint's assessment for Durgapur pellet (Fe 63%) stands at INR 14,400/t exw, up marginally by INR 50/t against the previous assessment.

On the other hand, Bellary iron ore pellet (Fe 63%) kept the offers stable at INR 13,000/t exw, as against last assessment of 30th July'21.

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.
  
  
• No deal reported in this publishing window hence not considered as T1 for index calculation being given a 0% weightage.
  
  
• Twelve (12) firm offers and indicative prices were reported. Six were from Raipur and the rest from outside the state capital. Seven were taken for price calculation and given a weightage of 100%.
  
  
• SteelMint received one bid today at INR 12,150/t DAP but not considered for the calculation of the index.
  
  

Region-wise pellet offers and deals: