Active Pellet Buying Keeps PELLEX Unchanged

Close to 30,000 MT pellets were traded in Raipur market so far this week after hike in P-DRI prices, SteelMint learned from sources.

SteelMint pellet Index (PELLEX) remains unchanged to INR 6,250/MT (DAP Raipur) in line with the last index published on 09th Aug’19.

Market sentiments in Raipur domestic pellet market improved this week following a sharp hike in pellet sponge prices D-o-D. Two deals for pellets total quantity around 30,000 MT reported yesterday at INR 6,100-6,200 (ex-plant, Raipur) from Raipur based pellet makers.

Pellet makers have kept their offers unchanged so far this week.

SteelMint's Pellet export realization for standard grade fell marginally to USD 100-103/MT FoB (Al 3% )due to sluggish buying in China.

NMDC production and dispatches are negatively impacted because of monsoons. Bulk pellet buyers are waiting for further fall in pellet price for substantial buying interest.

Why PELLEX? India has installed pellet capaci1ty of 85 MnT pa and an annual production of around 65-66 MnT. 5 major states - Odisha (28.9 MnT), Karnataka (19.5 MnT), Chhattisgarh (9.6 MnT), Jharkhand (8.4 MnT) and Andhra Pradesh (8 MnT) - covers around 85-90% of the capacity. Based on the above we have chosen Raipur as our index base as this market seems more active from a domestic merchant trading perspective along with exports. Also, Chhattisgarh has a good base for sponge iron makers (DRI) who procure a decent amount of pellets.

These factors have led SteelMint to launch this index of PELLET on DAP Raipur basis.
The proposed specifications, along with delivery terms were devised following consultation with market participants. They are as follows:
1. Fe Content - Fe 63-64%
2. Combined Silica & Alumina - 7%
3. Trade Size - 2,500-10,000 MT
4. Payment terms - Advance

SteelMint will continue to monitor changes in the pellet markets and will adjust its methodology in accordance with the market participants.