SteelMint: Trades gain momentum as PELLEX falls by INR 550/t

SteelMint's bi-weekly domestic pellet (Fe 63%) index, PELLEX, has come down sharply to INR 10,350/t DAP Raipur on 26 Nov'21, lower by INR 550/t against last assessment of INR 10,900/t on 23 Nov'21. Around  63,000 t deals were reported in the last two days post price cut announcement by pellet makers.

Central India-based pellet makers have decreased offers by INR 500/t two days back. Current offers stand at INR 10,500-10,800/t exw-Raipur. Sellers in Odisha's Jharsuguda also declined offers INR 700-800/t.

Few buyers are still hoping to decline prices further reason why they have hold the purchase for few more days. However, NMDC's iron ore price revision is also round the corner as per the sources. Buyers are eyeing for correction in domestic iron ore offers given the drop in sponge prices and active imported iron ore bookings.

SteelMint's assessment for sponge iron, P-DRI (FeM 80%), in Raipur stood at INR 28,800/t exw, down around INR 700/t against last week.

Indian pellet market overview: Pellet markets across regions witnessed drop in pellet prices sharply around INR 150-500/t on declining sponge iron prices. However, prices in  western India have remained stable.

Iron ore pellet (Fe 63%) prices in Bellary dropped to INR 10,400-10,500/t as against INR 10,500-10,700/t exw assessed on 23 Nov'21. Prices have fallen amid lower bids & drop in sponge prices.

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.
  
  
• Multiple deals were reported around 63,000 t in this publishing window hence considered as T1 trade for calculation of the index; accorded 50% weightage.
  
  
• Nine (09) firm offers and indicative prices were reported. Eight (08) were taken for price calculation and given 50% weightage.
  
  
• SteelMint received two bids and both were taken for calculation of index.
  
  

Region-wise pellet offers and deals: