India: PELLEX remains stable ahead of OMC iron ore auction

• Pellet offers remain firm in Raipur on moderate deals
• OMC lifts fines, lumps base prices for Feb’25 auction

Pellet prices in the Raipur region were recorded as stable over the past couple of days, amid need-based demand from steelmakers. A fall of around INR 300-400/tonne (t) ($3.5-4.5/t) in sponge iron and billet tags put pressure on market sentiments.

BigMint’s bi-weekly domestic pellet (Fe63%) index remained stable at INR 9,800/t ($113/t) DAP Raipur on 18 February 2025 compared to the previous assessment on 14 February. A Raipur-based supplier sold around 20,000 t in this publishing window.

Pellet offers in Raipur for Fe63% (+/- 0.5%) remained stable at INR 9,700-9,900/t ($112-114/t) exw over the past couple of days. However, deals were moderate amid weak market sentiments.

A trader informed BigMint, “Demand for raw pellets was somewhat subdued following the drop in the sponge and semi-finished prices, which kept buyers cautious regarding fresh deals. Some steelmakers are waiting for tomorrow’s auction from the Odisha Mining Corporation (OMC) to find out the new tradable levels for upcoming deals.”

Odisha-based plants kept their sales closed today ahead of the OMC iron ore auction. OMC has scheduled an auction for 2.617 mnt of iron ore (1.098 mnt of lumps and 1.519 mnt of fines) on 19 February. The miner increased base prices by INR 200-300/t and INR 150/t m-o-m for fines and lumps, respectively. For Fe55% fines, base prices were raised by INR 850/t.

Currently, the pellet market is stable in Odisha. A buyer noted, “Current workable prices of raw pellets have reduced amid weak market sentiments, which has slowed down pellet trade in the region. Steelmakers have concluded trades in only certain pockets.”

Market participants indicated that fresh trades are expected in Raipur following the OMC auction.

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 taken for calculations. The T1 trade category was accorded 50% weightage.
• Fifteen (15) 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 down w-o-w: P-DRI prices fell by INR 350/t ($3/t) w-o-w to INR 24,650/t ($284/t) exw-Raipur on 18 February. However, prices increased by INR 150/t ($2/t) d-o-d today. Minimal deals were recorded at the revised prices during the afternoon trading session. Buyers remained cautious, holding back on purchases amid uncertain market sentiments, while sellers adjusted spot prices in an attempt to attract buying interest.
• Billet prices drop w-o-w: Billet prices in Raipur also decreased by INR 350/t ($4/t) w-o-w to INR 39,150/t ($450/t) exw today. Furthermore, d-o-d, prices inched up by INR 50/t ($0.5/t). The index remained range-bound today, with a slight rise seen towards the close of trading, as soft demand at higher offers weighed on spot prices. This led to a decline in trading volumes, resulting in price volatility.

Outlook

According to BigMint’s analysis, pellet prices are expected to remain volatile this week amid the OMC iron ore auction and continuous fluctuations in semi-finished prices. Market trends will become clearer following the auction.