Raipur based plants' have kept their offers unchanged at INR 6,000/MT( Ex-plant); normalizing for freight to Raipur at INR 6,150/MT (DAP Raipur).
Two firm bids were reported in the range of INR 5,850 - 5,950 (DAP Raipur). SteelMint P-DRI assessment (Sept 06, 2019) at INR 16,000/MT against INR 15,900/MT (Ex-Raipur) a week before. Yesterday Raipur based sponge manufacturers sold over 6,000 MT P-DRI at INR 16,000/MT (Ex-plant).
One export deal was reported from KIOCL(Karnataka) to China at around USD 98/MT FoB India for Fe 64% grade (Al 2%). Few deals were also heard for Malaysia and Turkey. Since the export market is illiquid, export realization factor has been ignored in the computation of PELLEX.
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.