India: Pellet trade volumes in domestic market rises nearly 15% m-o-m in Jan’25

• Trade volumes swell on positive seasonal demand
• Total quantity sold in OMC’s iron ore auction rises m-o-m

The domestic pellet market recorded a month-on-month (m-o-m) growth of 14% in trade volumes in January 2025, according to BigMint data. Volumes reached 1.62 million tonnes (mnt), up from 1.43 mnt in December, driven by increased seasonal demand.

Factors driving pellet trades

• Active coastal trade: Increased coastal trade activities significantly boosted pellet volumes in the domestic market. Export-focused pellet plants shifted their attention to domestic sales due to better realisations. This strategic shift, driven by improved demand, has been a key driver of growth in pellet trade volumes.
• Increased demand: Pellet trade volumes saw a notable increase in January with all plants operating at full capacity amid a slight improvement in steel demand which boosted both pellet consumption and trade activities.
• Active participation in OMC auction: The Odisha Mining Corporation (OMC) conducted an iron ore auction on 17 January in which 2.57 mnt were booked signalling robust buyer participation. Buyers secured 1.078 mnt of lumps and 1.493 mnt of fines. The auction saw a m-o-m increase in sales for both categories, reflecting rising demand and active market engagement.
• Rise in pellet prices: Domestic pellet prices increased by INR 100-400/t m-o-m in January across regions. This price rise was primarily driven by higher production costs, reflecting increased input expenses and strengthening market dynamics.

M-o-m pellet trade comparison

BigMint’s PELLEX rises: BigMint’s domestic pellet index (PELLEX) was assessed at INR 9,500/t in January (weighted average), marking a rise of INR 300/t m-o-m. This upward trend was supported by higher offers from producers and increased demand in the finished steel segment, particularly in the Raipur cluster.

Outlook

Pellet trade volumes in February are expected to remain volatile in view of the financial year-end approaching and also due to weak steel market sentiments.