- Sponge, billet price hikes support pellet offers
- Prices may rise, propelled by improved buying
Pellet prices in the Raipur region remained firm over the past few days, supported by a recent uptick in sponge iron and semi-finished steel prices, along with market anticipation surrounding NMDC’s upcoming iron ore price revision for April deliveries.
BigMint’s bi-weekly domestic pellet (Fe63%) index remained stable at INR 10,250/t ($120/t) DAP Raipur on 4 April 2025 compared to the previous assessment on 1 April. In this publishing window, deals for around 7,000 t of pellets (Fe63%) were concluded by Raipur-based producers at INR 10,250-10,350/t ($120-121/t) DAP Raipur.
Market participants noted limited buying activity, as most buyers opted for need-based purchases while awaiting further clarity. A buyer commented: “We are buying only in small lots for now as we already have enough stock of raw material. The market is expecting a hike in iron ore prices, which could further push up pellet prices.”
Sellers, meanwhile, maintained firm offers, with a few prominent pellet producers choosing to close fresh sales and focus on dispatching material against previous deals. A local pellet producer said, “We are holding back new offers until NMDC announces its prices. We will revise the offers in the coming days.”
A trader mentioned that trade activity in the Raipur region remained moderate as buyers secured pockets of deals with local and Odisha-based plants. The prices are expected to head northward in the coming days thanks to a boost in buying interest.
Raipur-based pellet producers kept their offers stable for Fe63% (+/- 0.5%) pellets at INR 10,200-10,300/t ($118-119/t) exw-Raipur. Odisha-based pellet producers offered Fe 62.5/63% grade material in Raipur at INR 9,500-10,150/t ($111-118/t) DAP. Some pellet trades from Odisha to Raipur were also heard, though market sources stated that deal confirmations were still awaited.
As per sources, NMDC may revise iron ore prices this week for April delivery. The market kept fresh procurements on hold ahead of the NMDC price revision.
Rationale
- PELLEX has been derived using data points, ie, trades, offers, and bids. To download the detailed methodology, click here.
- Two (2) deals have been reported so far in this publishing window, and two (2) were taken for calculations. The T1 trade category was accorded 50% weightage.
- Sixteen (16) firm offers, bids, and indicative prices were heard. Twelve (12) were taken for price calculation and given the balance 50% weightage.
Factors impacting pellet prices
- Sponge iron tags edge up w-o-w: P-DRI prices rose by INR 700/t ($8/t) w-o-w to INR 26,600/t ($308/t) exw-Raipur on 3 April, with tags climbing up by INR 50/t ($0.5/t) d-o-d today.
- Billet prices climb up w-o-w: Billet prices in Raipur increased by INR 1,250/t ($15/t) w-o-w to INR 42,450/t ($491/t) exw today. Furthermore, d-o-d, prices inched down by INR 50/t ($1/t). The index saw further gains today, driven by an upward trend and influence from neighbouring markets, pushing spot offers higher. While buying activity in the semi-finished steel segment remained modest, finished steel demand witnessed a significant uptick, leading to improved buying interest and supporting price levels d-o-d.
Outlook
According to BigMint, NMDC’s price revision will provide the much-needed clarity, potentially leading to a pellet price hike of INR 200-300/t ($2-3/t) in the coming week if iron ore prices are raised, as expected.
Leave a Reply