SteelMint: PELLEX largely stable in recent deals

SteelMint's bi-weekly domestic pellet (Fe 63%) index, PELLEX, stands at INR 12,200/tonne (t) DAP Raipur on 01 Feb'22, up INR 50/t against the last assessment on 28 Jan. Around 15,000 t of deals were reported at INR 12,150/t DAP Raipur in this publishing window.

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 were reported and considered in this publishing window as T1 trades for calculation of the index; accorded 50% weightage.
  
  
• Seven (07) firm offers, bids and indicative prices were reported. Six (06) were taken for price calculation and given 50% weightage.
  
  
• SteelMint received two (02) bids and only one was considered for calculation of the index.
  
  

A pellet maker has increased domestic offers by INR 500/t ($7/t) to INR 12,500/t exw ($167/t) from INR 12,000/t ($161/t). Other producers in Raipur have kept offers unchanged. Meanwhile, a few central India-based pellet makers have put their plants under maintenance for the next two weeks.

Price indications in Jharsuguda, Odisha were stable at INR 11,500/t exw on 01 Feb. No deal has been done so far this week.

NMDC hikes iron ore prices up to INR 350/t for Feb deliveries: The much awaited price revision from NMDC was announced at the end of last week. India's largest iron ore miner, NMDC, has raised prices of the raw material by INR 200-350/t ($3-5) for Feb'22 deliveries.

Pellet buyers, on the other hand, were not much interested at present as they were more watchful. SteelMint sources' informed that pellet demand is low in the market at prevailing offers. Increasing coal offers have made sponge makers reluctant in buying pellets at high offers. There is still disparity in bids and offers.

In a confirmed deal, 25,000 t of South African RB2 (5500 NAR) coal was sold at INR 16,300/t at Haldia Port, while a rake was sold at INR 15,100/t at Gangavaram Port for Feb'22 arrival. Despite rising enquiries from sponge iron manufacturers, limited stocks at ports compelled traders to hold offers.

Pellet-based DRI (P-DRI, FeM 80%) prices in Raipur rose further by INR 1,100/t w-o-w to INR 34,900/t compared to last week's offers. However, on a daily basis, prices inched down INR 100/t.

Indian pellet market overview: Domestic pellet prices remained bullish across the regions on hike in sponge and coal prices.

Iron ore pellet (Fe 63%) prices in Bellary rose to INR 11,100/t exw today against INR 10,400/t on 28 Jan, as per SteelMint assessment. Confirmed deals for 7,000 t were recorded since the end of last week at INR 10,900-11,200/t exw.

Region-wise pellet offers and deals: