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SteelMint: PELLEX falls by INR 50/t on declining sponge iron prices

SteelMint’s bi-weekly domestic pellet index, PELLEX, fell marginally to INR 15,900/t, DAP Raipur. No deal was reported in this publishing window. The market cont...

Pellets
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29 Jun 2021, 19:40 IST
SteelMint: PELLEX falls by INR 50/t on declining sponge iron prices

SteelMint's bi-weekly domestic pellet index, PELLEX, fell marginally to INR 15,900/t, DAP Raipur. No deal was reported in this publishing window. The market continues to remain muted and trades have dried up on a steady decline in sponge iron prices amid subdued finished steel sales in the domestic market.

Raipur-based pellet producers have kept offers unchanged, with current offers for Fe 62.5%/63% pellet standing at INR 15,500-16,000/t, exw. However, Jharsuguda-based pellet makers reduced offers by around INR 700/t to INR 15,000/t, exw. A Raigarh-based pellet producer has resumed offers after a long gap and current offers are assessed at around INR 15,500/t, exw.

A majority of buyers are showing little or no interest in prevailing pellet offers in the market. Most buyers are worried about falling steel margins and conversion spreads and are planning to cut production in the coming days if the situation doesn't improve.

P-DRI prices in Raipur moved down further by INR 1,200/t w-o-w to INR 30,000/t, exw, against last week's price at INR 29,300/t. SteelMint's benchmark sponge P-DRI (FeM 80%) prices fell by INR 500/t d-o-d on 29 Jun'21.

Indian pellet market overview-: Indian pellet prices across regions have drifted down by around INR 150-700/t so far this week. SteelMint's assessment for Bellary iron ore pellet (Fe 63%) stands at INR 12,500/t, exw, lower by INR 400/t compared to the last assessment on 25 Jun.

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

  • No deal has been reported in this publishing window and hence not considered T1 for index calculation and given 0% weightage.

  • Six firm offers and indicative prices were reported. Three were from Raipur and the rest from outside the state capital. All the offers were taken for price calculation and given a weightage of 100%.

  • SteelMint also received a single bid which didn't qualify for price calculation of the Index.

Region-wise pellet offers and deals:

 

29 Jun 2021, 19:40 IST

 

 

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