- Weaker sponge, billet tags pressure pellet prices
- Buyers prefer competitive offers from Odisha
Pellet prices in Raipur declined this week, driven primarily by need-based purchases at lower trade values and a continuous weakness in sponge PDRI and semi-finished steel tags across central India. Raipur-based sellers concluded some deals, but several buyers opted to procure pellets from Odisha-based producers, who quoted lower offers.
PELLEX, BigMint’s bi-weekly domestic pellet (Fe63%) index, dropped by INR 200/tonne (t) ($2/t) to INR 9,950/t ($116/t) DAP Raipur on 25 April 2025 compared to the previous assessment on 22 April. In this publishing window, deals for around 22,000 t of pellets (Fe63%) were concluded by Raipur-based sellers at INR 9,900-10,050/t ($116-118/t) DAP. Deals for around 12,000 t were concluded by Odisha-based sellers in Raipur at INR 9,500/t ($111/t) DAP.
A seller stated, “The recent decline in steel tags is putting pressure on pellet inquiries, and buyers are opting out of closing trades. We are maintaining similar offers, but trade remained poor this week.”
Notably, some Raipur-based pellet producers kept their offers for Fe63% (+/- 0.5%) at INR 9,900-10,100/t ($116-117/t) exw, with some deals closed at these levels. Some Odisha-based sellers offered pellets in Raipur at INR 9,400-9,800/t ($110-115/t) DAP.
Market participants attributed the ongoing correction to the artificial price hike observed following the safeguard duty announcement on flat steel. A market participant informed BigMint, “The market has been gradually correcting after the sharp and unsustainable increase in the semi-finished steel prices. There is no strong demand push at the moment, and prices have been dropping steadily.”
Trading activity remained limited to need-based purchases, with bulk deals absent across the region. Buyers exercised caution, awaiting clarity on price stabilisation before booking larger quantities. A Raipur-based buyer noted, “We have managed to close a few low-volume deals at competitive prices from Odisha, especially against the higher offers from Raipur.”
Rationale
- PELLEX has been derived using data points, i.e., trades, offers, and bids. To download the detailed methodology, click here.
- Four (4) deals were reported so far in this publishing window, and three (3) were taken for calculations. The T1 trade category was accorded 50% weightage.
- Nineteen (19) firm offers, bids, and indicative prices were heard. Fourteen (14) were taken for price calculation and given the balance 50% weightage.
Factors impacting pellet prices
- Sponge iron tags fall d-o-d: P-DRI prices declined INR 150/t ($2/t) d-o-d to INR 25,350/t ($396/t) exw-Raipur on 22 April. Meanwhile, prices dropped by INR 250/t ($3/t) w-o-w. Today, prices showed a downtrend despite increased transaction volumes, as buyers procured material only after prices had bottomed out.
- Billet prices down d-o-d: Billet prices in Raipur decreased by INR 250/t ($3/t) d-o-d to INR 40,750/t ($477/t) exw today. Furthermore, w-o-w, prices moved down by INR 550/t ($6/t). The persistent demand slump exerted pressure on spot offers, compelling sellers to reduce prices to stimulate trade. However, market participation was limited, with only need-based procurement observed throughout the trading session.
Outlook
According to BigMint’s analysis, the market is expected to remain under pressure in the near term. Demand exists only at lower prices, and there is a lack of clarity on downstream steel market movements. With limited bulk orders seen and sellers adjusting their offers amid the competitive pricing environment, pellet prices in central India may continue to trend down unless there is a significant pick-up in sponge iron or finished steel demand.
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