SteelMint: PELLEX up by INR 350/t on active trade activities, lower inventories

SteelMint's bi-weekly domestic pellet (Fe 63%) index, PELLEX, stood at INR 8,500/tonne (t) DAP Raipur on 8 July 2022, up by around INR 350/t compared to the last assessment on 5 July. Around 35,000 t of pellet (Fe 62/Fe63%) deals were reported at around INR 8,300-8,650/t DAP Raipur and all were taken into consideration in this publishing window. Amidst a hike in sponge iron prices and lower raw material inventories, sponge iron producers remained active in securing pellet supplies.

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 totalling 35,000 t were reported and both were taken into consideration in this publishing window and hence accorded 50% weightage for T1 trade.
  
  
• Eight (08) firm offers, bids and indicative prices were reported. Around six (06) were taken for price calculation and given 50% weightage.
  
  
• SteelMint received two bids at around INR 7,150-8,450/t DAP Raipur, but only one was considered for calculation of the index.
  
  

As per sources, pellet demand in the market improved as the rainy season started approaching. Most of the buyers are preferring pellet over iron ore owing to moisture content in the latter. Buyers also indicated some shortage of iron ore during heavy monsoon.

Pellet-based DRI (P-DRI, FeM 80%) prices in Raipur rose by INR 2,000/t w-o-w to INR 34,900/t exw. On a daily basis, sponge iron prices increased by around INR 600/t. Prices remained strong on continued active demand, tight supplies and rising billet and coal prices.

Indian pellets market overview:

• Current assessment for Odisha's Barbil iron ore pellets (Fe 63%) stands stable at INR 7,100/t loaded on to wagon.
  
  
• Iron ore pellet (Fe 63%) prices in Bellary moved up to INR 9,800/t exw today as against INR 9,400/t on 5 July, as per SteelMint's assessment. Prices have been climbing up since end-May.
  
  

Region-wise pellet offers and deals: