India: PELLEX remains stable post OMC auction amid weak steel market

• Bid-offer disparities slow down trade
• Bids rise INR 150/t in OMC’s fines auction

Pellet prices in the Raipur region remained largely stable this week following the recent Odisha Mining Corporation (OMC) iron ore fines auction. However, market activity slowed down significantly due to lack of offers in the market. Trading activity was limited due to a growing disparity between bids and offers, observed industry sources.

Price movements, trades

PELLEX, BigMint’s bi-weekly domestic pellet (Fe63%) index for Raipur, remained unchanged at INR 9,700/tonne (t) ($112/t) DAP on 22 July 2025 compared to the previous assessment on 18 July. Few pellet makers are keeping sales closed and not active in the market so far.

Deals for around 25,000 t of pellets were concluded by local sellers at INR 9,500-9,600/t exw this week. Raipur-based pellet producers kept offers stable for Fe 63% (+/-0.5%) material at INR 9,500-9,700/t ($110-112/t) exw.

Pellet (Fe 62.5-63%) offers from Odisha for Raipur were heard at INR 9,500-10,000/t ($110-116/t) DAP.

Market scenario

Pellet producers maintained current prices amid a marginal increase in OMC auction bids. However, buyers remained cautious amid weak sentiment in the semi-finished and finished steel markets, waiting for price corrections before booking fresh material.

Notably, iron ore fines bids increased by INR 150/t m-o-m in OMC’s July auction, with around 1.3 mnt sold.

A Raipur-based steelmaker said, “Currently, the semi-finished and finished steel markets are very weak, and pellet prices are high both in Raipur and Odisha. These levels are not workable for most steelmakers. Deals are happening only in some pockets, and most buyers are waiting on the sidelines.”

Some more sources added that the negative realization in sponge iron production has forced many players to pause procurement in expectation of a price correction in pellets. Despite w-o-w hike in sponge offers, the production cost and sales prices are not matching.

On the supply side, a local pellet producer informed BigMint, “We are receiving fewer inquiries at current offers. There is a clear bid-offer mismatch in the market, which is restricting trade.”

Given the prevailing weak demand and high input cost pressure, market participants expect continued volatility in pellet pricing. While some pointed to a possible decrease in offers to boost demand, others believe that any rise in sponge prices could support current pellet rates.

Rationale

• PELLEX has been derived using data points, i.e., trades, offers, and bids. To download the detailed methodology, click here.
• Two (2) deal was reported in this publishing window and taken for calculation. Thus, the T1 trade category was accorded 50% weightage.
• Eighteen (18) firm offers, bids, and indicative prices were heard. Fifteen (15) were taken for price calculation and given a balance of 50% weightage.

Key market drivers

• Sponge iron tags rise w-o-w: P-DRI prices rose by INR 650/t ($8/t) w-o-w to INR 23,900/t ($277/t) exw-Raipur on 22 July. Meanwhile, prices saw a rise of INR 50/t ($0.5/t) d-o-d today. However, limited trades were concluded in the Raipur market amid weak market sentiments.
• Billet prices inch up w-o-w: Billet prices in Raipur inched up by INR 300/t ($3.5/t) w-o-w to INR 36,700/t ($425/t) exw today but remain stable d-o-d. Finished steel demand was subdued, with a significant gap between billet procurement and finished steel sales.

Outlook

The market outlook hinges on sponge price trends and whether demand revives post-monsoon, which typically lifts buying sentiment.