- Sponge PDRI, billet tags drop on weak finished demand
- Base prices yet to be released for OMC’s iron ore auction
Pellet prices in the Raipur region remained largely stable this week, with limited trading activity observed. Sellers kept their offers unchanged despite subdued buying interest from steelmakers. Market participants noted that most buyers adopted a cautious approach, procuring material only on need basis.
Price movements, trades
PELLEX, BigMint’s bi-weekly domestic pellet (Fe63%) index for Raipur, remained stable at INR 10,300/t ($117/t) DAP on 16 September 2025 compared to the previous assessment on 12 September. Deals for around 5,000 t were recorded in the Raipur market in the last couple of days, concluded by local pellet suppliers.
Raipur-based pellet producers kept their offers for Fe 63/63.5% (+/-0.5%) material stable at INR 10,200-10,500/t ($116-119/t) exw recently. Meanwhile, a few plants were under maintenance shutdown.
Some Odisha-based suppliers offered pellets at INR 10,000-10,400/t ($114-118/t) DAP Raipur, but buyers favoured deals from local plants.
Market scenario
The slowdown in demand comes against the backdrop of a recent decline in sponge PDRI and semi-finished steel prices, which has weighed on market sentiment. A trader informed BigMint, “Major buyers are holding back purchases, expecting some clarity after the upcoming OMC auction. Sponge pellet and billet prices decreased in the last couple of days, keeping the market sentiment under pressure.”
Raipur-based supplier added, “Inquiries are limited, and buyers are pressing for lower prices, but we are maintaining our offers until clearer signals emerge.”
Adding to the situation, a few local and neighbouring plants kept their sales closed, resulting in tighter availability in the spot market. Odisha-based suppliers have also been seen offering material in Raipur at levels similar to local sellers, ensuring no significant shift in overall market dynamics.
A buyer said, “We have already procured enough material in the previous purchase, and our plant is under maintenance shutdown, so the delivery of the material is pending. We are not going to make further purchases and are waiting for a drop in pellet prices.”
Market participants noted that the outcome of the OMC auction, scheduled later this week, will play a crucial role in determining workable price levels for the pellet market.
A buyer stated, “The auction results will set the tone for buyers and sellers alike. Until then, both sides are reluctant to take aggressive positions.”
Rationale
- PELLEX has been derived using data points, i.e., trades, offers, and bids. To download the detailed methodology, click here.
- One (1) deals were reported in this publishing window and was taken for calculation. Thus, the T1 trade category was accorded 50% weightage.
- Twenty (20) firm offers, bids, and indicative prices were heard. Thirteen (13) were taken for price calculation and given a balance of 50% weightage.
Key market drivers
- Sponge iron tags down w-o-w: P-DRI prices dropped by INR 250/t ($3/t) w-o-w to INR 24,000/t ($273/t) exw-Raipur on 16 September while remaining stable d-o-d. Sponge iron prices remained unchanged d-o-d in Raipur amid limited bookings.
- Billet prices decline w-o-w: Billet prices in Raipur dropped by INR 950/t ($11/t) w-o-w to INR 36,500/t ($416/t) exw today. Prices decreased by INR 250/t ($2/t) d-o-d. Persistent weakness in finished steel demand weighed on billet procurement. Although spot offers softened, buyers remained on the sidelines, expecting further corrections. Weather-related disruptions and slow downstream offtake are likely to keep sentiment subdued in the short term.
Outlook
According to BigMint, pellet prices are expected to correct after the OMC auction outcome. However, market participants stated that major suppliers are waiting for base prices to be announced to adjust their offers.
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