SteelMint: PELLEX up marginally in recent deals

SteelMint's bi-weekly domestic pellet index "PELLEX" increased by around INR 50/t today (30th Oct'20) to INR 9,100/t, DAP Raipur in recent deals. Deals for 18,000 t pellet have been concluded by Raipur based sellers in this publishing window.

Few pellet makers from Raigarh and Jharsuguda have hiked offers by INR 200-300/t in the last three-four days. They are also planning to hike offers further. Market participants told SteelMint that amid scarcity of high-grade ore there are chances of lowering of pellet grade to Fe 62% compared to previous grade of Fe 64/63%.

Pellet sponge (P-DRI) prices have increased sharply in the last one week by around INR 900/t w-o-w to INR 21,700/t exw, Raipur. However, on a daily basis sponge prices have decreased by INR 150/t today.

Market overview-: Pellet prices in other regions like Jamshedpur, Durgapur and Bellary have also been increased by INR 200-400/t w-o-w amid hike in sponge prices.

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 18,000 t pellets have been concluded by Raipur based pellet makers in this publishing window at INR 9,000-9,200/t (DAP Raipur). These transactions were taken into consideration for price calculation and weightage given 80%.
  
  
• Three firm offers were reported this week at INR 9,050-9,250/t (DAP, Raipur) and the rest three from outside Raipur at INR 9,050-9,250/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: