India: PELLEX remains stable as demand stays soft but sponge, billet rally to support prices

• Sharp hike seen in sponge iron, billet prices today
• Market awaits OMC auction result

Pellet prices in Raipur remained stable on 19 December while buying interest continued to stay muted amid prevailing market uncertainty, according to market participants.

Price movements, trades

PELLEX, BigMint’s bi-weekly domestic pellet (Fe63%) index for Raipur, remained stable at INR 9,400/t ($103/t) DAP on Tuesday compared to the previous assessment on 16 December. Trading activity in Raipur remained limited on weak buying interest from steelmakers.

Raipur-based producers kept their offers for 62.5/63% (+/-0.5%) material stable at INR 9,300-9,600/t ($102-106/t) exw recently. Meanwhile, some Odisha-based sellers offered at INR 9,500-9,900/t DAP in Raipur.

Market scenario

Sources said that buyers largely stayed on the sidelines, awaiting clarity from today’s NMDC Chhattisgarh and Odisha Mining Corporation (OMC) iron ore auction results. Participants noted that the auction outcome is expected to provide clearer direction on raw material costs, which will play a key role in shaping near-term pellet procurement strategies.

Market participants informed that the pellet market remained under pressure earlier this week, mainly due to weak downstream demand and falling sponge iron and semi-finished steel prices. However, sentiment improved marginally today after sponge iron and billet prices registered a sharp increase of around INR 300-600/t.

A Raipur-based buyer said that fresh trades may materialise only if the downstream market sustains the current price hike. He added, “The market is muted at present, but if sponge iron and billet prices remain firm, pellet demand could see some recovery.”

On the supply side, pellet producers continued to keep their offers unchanged despite limited buying interest. However, counter bids from buyers remained low, reflecting cautious sentiment in the market. Producers were reportedly reluctant to revise prices, citing expectations of support from the downstream market in the coming days.

Another steelmaker commented, “The Raipur pellet market witnessed muted activity as no fresh deals were reported from suppliers based in other regions. We expect greater clarity over the next few days, as movements in sponge iron and billet prices, along with iron ore auction results, define the demand-supply dynamics for pellets.”

Rationale

• PELLEX has been derived using data points, i.e., trades, offers, and bids. To download the detailed methodology, click here.
• No deal was recorded in this publishing window, not taken for calculation. Thus, the T1 trade category was accorded 0% weightage.
• Twelve (12) firm offers, bids, and indicative prices were heard. Twelve (12) were taken for price calculation and given a balance of 100% weightage.

Key market drivers

• Sponge iron prices rise w-o-w: Sponge iron prices rose by INR 300/t ($4/t) w-o-w on 19 December to INR 22,900/t ($255/t) exw-Raipur. Furthermore, prices rose by INR 350/t ($4/t) d-o-d. Overall, steel market sentiment strengthened after India imposed a five-year anti-dumping duty on imports of cold rolled non-oriented (CRNO) electrical steel from China. The decision, based on DGTR findings, cited dumped imports causing price suppression, loss of market share, and declining profitability for domestic producers. This policy move boosted confidence across the steel value chain, encouraging sellers to raise offers amid expectations of reduced import pressure.
• Billet prices firm w-o-w: BigMint’s billet index increased by INR 1,200/t ($13/t) w-o-w to INR 37,350/t ($405/t) exw-Raipur on 19 December. Prices rose by INR 550/t (7/t) d-o-d. Market sentiment remained volatile but positive, as rising finished steel prices and better offtake across key consuming regions encouraged participants to increase bookings in the semi-finished steel segment. Improved confidence stemming from the sustained rally in finished steel prices prompted buyers to return to the market, resulting in renewed optimism for near-term stability and forward bookings across varied offer levels.

Outlook

According to BigMint’s analysis, the pellet market in Raipur remains in a wait-and-watch mode, with near-term direction hinging on downstream sustainability and iron ore price signals.