SteelMint pellet index up by INR 500/t; limited trades reported
SteelMint's bi-weekly domestic pellet index "PELLEX" increased sharply by INR 500/t on Tuesday (01st Sept'20) to INR 8,600/t DAP in recent trades. Two deals having total quantum of 4,000t were reported by two Raipur based pellet maker to outside Raipur in this publishing window. Pellet sponge offers have retreated today after registering a sharp increase yesterday and currently stand at INR 20,000/t exw today against INR 19,200/t on 28th Aug.
Raipur pellet makers increased offers by INR 200-400/t to INR 8,850-8,950/t (DAP, Raipur) this week. Few pellet makers in and outside Raipur is on maintenance shut down and others are not offering owing to lack material availability. Therefore, participants reported shortage of pellet amid limited sellers in the market at the moment.
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
Assigning weightage to data points:
- Two domestic pellet deals have been concluded for 4,000 t at INR 8,850-8,950/t (DAP, Raipur) in this publishing window. They were considered for price calculation and given a weightage of 66.7%.
- Two firm offers were reported this week at INR 8,850-8,950/t (DAP, Raipur) and the rest two from outside Raipur at INR 9,000-8,950/t (DAP, Raipur) which have been given a weightage of 16.7%.
- One firm bid was reported but not considered for price calculation 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 6,900/t and given a weightage of 16.7%.
- 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: