PELLEX Stable at INR 6,100/MT

PELLEX remain stable at INR 6,100/wmt (DAP Raipur) due to limited trades reported. Raipur based pellet makers concluded 2500-3000MT pellet at INR 6,200/MT (Ex-plant) normalizing for freight to Raipur at INR 6,350 (DAP Raipur).

NMDC (C.G.) this week lowered Iron ore prices by INR 200/MT in both lumps and fines and INR 230/MT in DRCLO.

Some of the other pellet deal also reported in this publishing window from Raipur based pellets maker for around 5,00-1,000 MT pellets at INR 6050-6,100/MT (Ex-plant) normalizing for freight to Raipur at INR 6,200-6,250 (DAP Raipur). The same has not been considered for calculation of pellet as these deals were not fallen under Pellex methodologies.

SteelMint's P-DRI Assessment (Aug 23, 2019) up by INR 300/MT to INR 15,600/MT (Ex-Raipur) against P-DRI assessment on Aug 21, 2019, at INR 15,300/MT (Ex-Raipur) amid some deals reported at these levels.

No export transactions were reported to China amid sluggish Chinese demand. Pellet Export realization stands stable at USD 96-100/DMT FoB (Al 3%) due to the absence of bids from China.

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.