India: PELLEX remains stable as sellers maintain offers

• Sponge iron, billet tags fall w-o-w, prompting buyer caution
• Sellers focus on fulfilling past orders rather than entering deals

Pellet prices in the Raipur region remained largely stable this week, with market activity slowing down significantly. Local sellers maintained their previous offers, given the limited enthusiasm observed in deal negotiations. The recent decline in sponge iron and billet prices made buyers more cautious, further reducing their appetite for pellets in the spot market.

PELLEX, BigMint’s bi-weekly domestic pellet (Fe63%) index, remained stable at INR 10,250/tonne (t) ($120/t) DAP Raipur on 15 April 2025 compared to the previous assessment on 11 April. In this publishing window, deals for around 5,000 t of pellets (Fe63%) were concluded by Raipur-based sellers at INR 10,200-10,300/t ($119-120/t) exw.

A market participant commented, “Buyers are taking a wait-and-watch approach due to the drop in sponge PDRI and finished steel prices. They are not keen to book fresh pellet volumes unless there is clarity on price direction.”

Despite stable offers, sellers primarily focused on dispatching material for previously concluded deals rather than entering into new bulk transactions. Market sentiment remained muted, with limited inquiries and subdued deal finalisations.

Raipur-based pellet producers kept their offers stable for Fe63% (+/- 0.5%) material at INR 10,100-10,200/t ($118-119/t) exw-Raipur. However, certain leading sellers from Raipur kept the sales closed. Odisha-based pellet producers offered Fe62.5/63% grade in Raipur at INR 9,400-10,100/t ($110-118/t) DAP.

A Raipur-based pellet producer noted, “Inquiries were strong last week, but market confidence was low at the start of this week due to weak sentiments. Some buyers are accepting orders that have already been in the pipeline while avoiding new deals. Additionally, we are maintaining our offers.”

Meanwhile, pellet suppliers from Odisha also continued to offer material at last week’s prices in the Raipur market. However, no significant trading activity was reported, indicating a broader sluggishness in demand.

A pellet producer from Odisha informed BigMint, “We are offering the same levels as last week, but buyers are hesitant. Counters from Raipur-based buyers were lower than our offers.”

Overall, market participants expect the current trend of subdued demand and cautious buying to continue unless there is a reversal in sponge and billet price trends.

NMDC auctioned around 68,200 t of iron ore from its Bacheli mines, Chhattisgarh, on 11 April. The entire 25,800-t DRCLO (10-40 mm, Fe 67%) lot was booked at a premium of INR 630/t on the base price of INR 7,130/t, while 8,000 t of Baila-sized lumps (10-20 mm, Fe 65.5%) were booked at a premium of INR 660/t on the base price of INR 6,500/t. However, 34,400 t of Baila fines (Fe 64%) remained unsold. Prices were on FOR, ex-stockpile/mines basis, including royalty, DMF, and NMET.

Rationale

• PELLEX has been derived using data points, i.e., trades, offers, and bids. To download the detailed methodology, click here.
• One (1) deal was reported so far in this publishing window and taken for calculations. The T1 trade category was accorded 50% weightage.
• Seventeen (16) firm offers, bids, and indicative prices were heard. Sixteen (11) were taken for price calculation and given the balance 50% weightage.

Factors impacting pellet prices

• Sponge iron tags fall w-o-w: P-DRI prices dropped by INR 350/t ($4/t) w-o-w to INR 25,750/t ($300/t) exw-Raipur on 15 April, with tags inching down by INR 50/t ($0.5/t) d-o-d today. Sponge iron prices fell following continued buyer caution amid elevated prices. Trade activities were average as a result of buyers’ caution and a reluctance to make firm commitments at higher rates.
• Billet prices drop w-o-w: Billet prices in Raipur decreased by INR 250/t ($3/t) w-o-w to INR 41,350/t ($482/t) exw today. However, d-o-d, prices edged up by INR 50/t ($0.5/t). Market sentiments turned positive during the latter half of the trading session today, driven by a surge in demand for finished steel, particularly in Raipur. This uptrend extended to the semi-finished steel segment, which eventually witnessed robust bookings. As a result, there was an overall improvement in trade volumes d-o-d.

Outlook

According to BigMint’s analysis, pellet prices in Raipur are expected to remain firm this week, while market participants are waiting for the outcome of the April Odisha Mining Corporation (OMC) auction, which is scheduled this week. Buying interest may remain moderate, following need-based trades by buyers from both local and Odisha-based pellet sellers.