PELLEX stable at INR 5,950/wmt(DAP Raipur) amid limited trades. Single deal was reported in this publishing window from Raipur to Bilaspur around 3,000MT at INR 6,050/MT (DAP Raipur).
Raipur based pellet maker kept pellet offers stable at INR 6,000/MT( Ex-plant); normalizing for freight to Raipur at INR 6,150/MT (DAP Raipur). Four bids were reported at INR 5,650-5,750/MT (DAP Raipur).
No export deals reported. Pellet Exports indications stand for Fe 64% (3% Alumina) at around USD 91-92/MT, FoB India. Ex -Plant export realization for Raipur pellet maker at INR 5,100-5,200/WMT. In Central India the export market is illiquid, therefore export realization factor has been ignored in the computation of PELLEX.
Considering the land cost of Lump and other factors like yield, conversion cost etc for NMDC and Orissa; the substitute parity price for Pellet is INR 5,710/MT (DAP Raipur).
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.
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