SteelMint's bi-weekly domestic pellet index "PELLEX" has moved down further by INR 150/t on Friday (18th Sept'20) to INR 8,900/t DAP Raipur amid the absence of trades. Domestic pellet supply is expected to improve as one pellet maker in Raipur which was under maintenance shutdown has resumed production.
As per the sources, buyers at this point of time are reluctant to buy pellets and are watching the market more closely before making bookings.
Raw material shortage continues to remain a concern as iron ore offers increased further last week.
Pellet sponge prices moved up slightly on improved semi-finished demand and stood at INR 19,400/t exw-Raipur. However, on weekly basis, prices are still lower by INR 200/t against INR 19,600/t a week before.
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.
- No deal has been concluded in this publishing window. Therefore not considered for price calculation.
- Four firm offers were reported this week at INR 8,950-9,050/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 50%.
- Two firm bids have been reported for the price calculation at INR 8,650-,8,950/t DAP, Raipur in this publishing window, and given a weightage of 50%.
- 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 7,500/t and given a weightage of 0%. As the rake movement has slowed down due to monsoons and has decreased to 12 rakes (between 1st to 10 Sept'20) against 17 rakes of last month in the same timeframe, not considered for price calculation.
- 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:
Region-wise pellet deals and offers: