India: Pellet trades gain momentum in Mar’25, rise by 25% m-o-m

• Pellet export deals decline in March
• NMDC strike drives trade volumes in Raipur

The domestic pellet market recorded a hike of 25% m-o-m in trade volumes in March 2025, according to BigMint data. Total volumes stood at 1.43 million tonnes (mnt) against 1.14 mnt in February. Notably, BigMint recorded around 13 mnt of trades in the domestic market from merchant sellers.

Several key factors contributed to this upward momentum in the last month of the just-concluded fiscal year, reflecting the dynamics of raw material availability, pricing trends, NMDC workers’ strike and market sentiment. The growth in pellet trade was observed across the India except for the Barbil and Jamshedpur markets. The decline in these regions was attributed to maintenance shutdowns at certain Barbil-based plants, while bid-offer disparity weighed on trades in Jamshedpur.

The upward movement in sponge iron (PDRI) prices also contributed to higher pellet purchases. Buyers were aggressive spurred by uncertainties surrounding future market conditions. This proactive approach in securing material ensured sustained trading activity throughout March.

A market participant commented: “Due to the increase in prices for sponge iron and semi-finished products, market sentiment improved, prompting buyers to restock iron ore pellets. Additionally, some pellet manufacturers offered their products more actively to maximise sales before the end of the financial year.”

Factors driving pellet trades

• Bids rises in OMC auction: In OMC’s auction for 1.324 mnt fines (Fe 51-65%) on 20 March, around 1.286 mnt fines was booked at INR 3,700-5,500/t ex-mines. Weighted average bids rose by INR 200/t for fines, while the miner had increased the base prices by around INR 200-300/t m-o-m. Iron ore auction in March saw increased bid prices, which, in turn, provided strong support to domestic pellet prices. The rise in auction prices was primarily driven by constrained iron ore availability towards the end of FY25.
• Pellet exports decline m-o-m: BigMint’s India pellet (Fe 63%, 3% Al) export index (FOB east coast) significantly declined by $8/t m-o-m to $96/t in March. As a result, domestic sales gained momentum, with more material being absorbed within the Indian market. Exporters were supplying cargoes booked in February and so March spot deals were weak for pellets.
• Sponge iron prices increase m-o-m: BigMint’s sponge iron, PDRI index was assessed at INR 25,600/t exw Raipur in March (weighted average), climbing up by INR 800/t m-o-m. A hike of INR 300-700/t m-o-m was observed in sponge iron prices.
• NMDC strike in March: The NMDC worker’s union strike for wage hike affected iron ore production and dispatches for over two weeks in mid-March. The strike came at a time when the company was racing against time to meet the annual target. As a result, major buyers in central India preferred pellets over lumps, which led to a whopping 160% rise in deals by Raipur-based pellet producers.

M-o-m pellet trade comparison

PELLEX, indices rise m-o-m

BigMint’s domestic pellet index (PELLEX) was assessed at INR 9,875/t DAP Raipur in March (weighted average), a rise of INR 50/t m-o-m. Trade volumes also increased amid active sales by local sellers. PELLEX saw a rise of INR 150/t y-o-y to INR 9,650/t DAP Raipur in FY’25. Prices in Barbil, Durgapur and Raipur rose by INR 100-200/t m-o-m.

Outlook

According to BigMint, domestic pellet demand is expected to remain strong in the coming months with iron ore mines’ EC renewals and expectations of a rise in sponge iron prices continuing to shape the market. Additionally, fluctuations in global pellet prices could influence trade patterns, with buyers closely monitoring price trends before making further commitments. Pellet prices may head north following the imposition of the 12% safeguard duty on imported steel.