SteelMint: PELLEX up by INR 150/t on tight availability

SteelMint's bi-weekly domestic pellet index "PELLEX" increased by around INR 150/t today (20th Oct'20) to INR 8,700/t, DAP Raipur in recent deals. Deals for 45,000 t pellets have been concluded by Raipur based pellet makers in this publishing window. Prices have strengthened on limited availability.

According to market sources, two of the Raipur-based major pellet maker is planning to go for annual maintenance shut down in coming few days.

Pellet sponge (P-DRI) prices have increased by around INR 500/t w-o-w to INR 20,100/t exw, Raipur against INR 19,600/t a week ago. However, on a daily basis sponge prices have increased by INR 200/t.

Market overview-: Pellet prices in other regions like Jamshedpur and Bellary have also been increased by INR 100-200/t this week amid hike in sponge offers. Western India base pellet maker - Jindal SAW hike pellet offer (Fe 63%) by around INR 500/t to INR 10,350/t (Del. Kandla) against last offer at INR 9,850/t.

Rationale - PELLEX has been derived using five data points: i.e trades, offers, bids, substitute parity, and export realizations. You can download the detailed methodology by clicking on this link Click here.

• Deals for 45,000 t pellets have been concluded by Raipur based pellet makers in this publishing window at INR 8,650-8,750/t (DAP Raipur). The transaction was taken into consideration for price calculation and given weightage given 80%.
  
  
• Two firm offers were reported this week at INR 8,650-8,850/t (DAP, Raipur) and the rest three from outside Raipur at INR 8,550-8,750/t (DAP, Raipur) which have been given a weightage of 20%.
  
  
• No firm bid has been reported in this publishing window, and given a weightage of 0%.
  
  
• SteelMint calculated the price at which Raipur pellet can displace NMDC lump in the sponge rotary kiln feed (substitute parity) on a DAP Raipur basis at INR 7,800/t and given a weightage of 0%.
  
  
• The export realization factor has not been considered as pellet makers are less active in exports owing to an increased domestic realization.
  
  

Calculation of Index:

Source-: SteelMint

Region-wise pellet deals and offers: