- Market sees need-based deals amid cautious sentiment
- Rising raw material costs, tight supply support prices
Pellet prices in Raipur remained stable over the past few days despite mixed sentiments prevailing in the market. Market participants stated that trading activity was moderate, with local pellet suppliers concluding limited deals. Buyers, however, remained cautious and mostly booked material on an urgent need basis, refraining from any aggressive buying.
Price movements, trades
PELLEX, BigMint’s bi-weekly domestic pellet (Fe63%) index for Raipur, remained unchanged at INR 10,100/t ($115/t) DAP on 8 August 2025 compared to the previous assessment on 5 August.
Raipur-based producers maintained their offers for Fe 63% (+/-0.5%) at stable levels of INR 9,900-10,000/t ($113-114/t) exw. Deals for around 25,000 t were concluded over the last couple of days by local pellet suppliers.
Pellet (Fe 62.5-63%) offers from Odisha for Raipur were heard at INR 9,700-10,200/t ($111-116/t) DAP. Deals were absent in the Raipur market from Odisha-based suppliers amid the logistical challenges due to the monsoon.
Market scenario
The cautious procurement was largely attributed to the softening in prices of downstream products, particularly sponge PDRI and billets. This price dip kept many buyers in a wait-and-watch mode, who were hoping for clearer trends before entering bulk deals.
A local steelmaker noted, “Buyers are currently avoiding high-volume purchases as billet and sponge prices are weakening. We are fulfilling only urgent needs.”
Despite the subdued demand, pellet prices found support from the rising cost of raw materials in the central-eastern region. Additionally, continuous heavy rainfall across mining belts disrupted production and dispatches, tightening supply in the market.
A pellet producer stated, “Logistics and material availability have become major issues due to the rains. This has indirectly supported pellet prices, keeping them from falling.”
Inquiries from steelmakers have been selective and strategic, with most buyers opting for local suppliers. The price gap between Odisha-origin and Raipur-origin pellets has narrowed. Buyers cited better moisture control and faster delivery timelines as reasons for preferring local material.
Rationale
- PELLEX has been derived using data points, i.e., trades, offers, and bids. To download the detailed methodology, click here.
- Two (2) deals were reported in this publishing window, and both were 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 fall w-o-w: P-DRI prices fell by INR 250/t ($3/t) w-o-w to INR 24,400/t ($278-279/t) exw-Raipur on 8 August. Meanwhile, prices decreased by INR 100/t ($1-1.5/t) d-o-d today. Amid muted demand, sellers were compelled to reduce prices in an attempt to boost trade, but buyer participation remained limited. Most buyers adopted a wait-and-watch approach, refraining from bulk procurement due to sluggish finished steel sales and expectations of further price corrections.
- Billet prices drop w-o-w: Billet prices in Raipur decreased by INR 50/t ($0.5/t) w-o-w to INR 37,500/t ($426-427/t) exw today while falling INR 50/t ($0.5/t) d-o-d too. The semi-finished market extended its sluggish momentum amid a persistent slowdown in finished steel demand, which further pressured billet spot offers during the day. Most key regions witnessed softening market sentiments, with only need-based buying observed throughout the day.
Outlook
Pellet prices are expected to remain firm, backed by seasonal demand and supply-side limitations. Deals may remain volatile in the coming week due to upcoming festivals.
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