India: PELLEX falls by INR 100/t ($1/t), trades yet to pick up

• Sponge iron and billet prices fall w-o-w
• NMDC rake movements rise in Jan’25

Raipur’s iron ore pellet market remained under pressure, with trading activity limited to need-based purchases. Buyers were cautious after a decline in sponge iron and steel prices following the recent Union Budget. Due to price concerns, no deal was reported from neighbouring regions.

BigMint’s bi-weekly domestic pellet (Fe63%) index fell by INR 100/t ($1/t) to INR 9,800/t ($114/t) DAP Raipur on 7 February 2025 compared to the previous assessment on 4 February. A buyer booked around 10,000 t pellets (Fe63%). The deal was recorded at INR 9,700/t DAP Raipur concluded by a local producer.

Pellet-makers’ offers in Raipur for Fe63% (+/- 0.5%) remained stable at INR 9,700-9,900/t ($113-115/t) exw. Odisha-based plants offered pellets to Raipur at INR 9,500-9,900/t ($110-115/t) DAP with no deals recorded.

A trader informed, “Buyers are hesitant to place bulk orders as they are waiting for a clearer price trend. With sponge iron and steel prices dropping, many are taking a cautious approach. Some plants are showing interest in procuring NMDC’s DRCLO as an alternative to pellets to maintain the sponge iron cost.”

Sellers maintained stable prices as demand was not completely absent. However, buyers are not willing to commit to large volumes. Inquiries for material purchases remained moderate, with most buyers adopting a wait-and-watch approach.

A steelmaker commented: “Pellet prices in the neighbouring regions are not aligning with Raipur pellet prices. So buyers are procuring material from Odisha. Most transactions are happening with local sellers and those too are on the basis of immediate requirements.”

Rationale

• PELLEX has been derived using data points, i.e., trades, offers, and bids. To download the detailed methodology, click here.
• One (1) deal has been reported so far in this publishing window and was taken for calculations. Thus, the T1 trade category was accorded 50% weightage.
• Fourteen (14) firm offers, bids, and indicative prices were heard. Eleven (11) were taken for price calculation and given the balance 50% weightage.

Factors impacting pellet prices

• Sponge iron tags drop w-o-w: P-DRI prices fell by INR 500/t ($6/t) w-o-w to INR 24,750/t ($283/t) exw-Raipur on 7 February. Meanwhile, prices decreased by INR 150/t ($2/t) d-o-d today. Sponge iron prices fell amid the lack of buying interest today. Deals remained absent in Raipur today amid cautious buying trends.
• Billet prices fall w-o-w: Billet prices in Raipur decreased by INR 650/t ($7/t) w-o-w to INR 38,850/t ($444/t) exw today. Furthermore, d-o-d, prices moved down by INR 200/t ($2/t). The index witnessed a decline today due to limited buying, driven by downward market sentiments and weakening finished steel demand.
• NMDC rake movements rise: NMDC dispatched 172 (0.66 mnt) iron ore rakes to Chhattisgarh-based units in January, an increase of 7%, as against 161 (0.62 mnt) in December. Stability in sponge iron prices and lower iron ore prices boosted procurement.

Outlook

According to BigMint’s analysis, market players expect some clarity in pricing trends in the coming days, which could influence trade activity in Raipur’s pellet market. However, sponge iron producers are expected to engage in need-based transactions.