India: PELLEX rises by INR 100/t ($1/t) on supportive downstream sentiments

• Raipur-based sellers increase pellet offers by INR 100/t
• Sharp hike in semi-finished steel prices amid aggressive trades

Pellet prices in the Raipur market witnessed a marginal hike of around INR 100/t on 30 December following a fresh revision in offers by Raipur-based suppliers. The upward movement was largely supported by the recovery seen in the downstream steel market, which saw a sharp price increase of nearly INR 1,000-1,500/t for select products the previous day, accompanied by some aggressive trade activity.

Price movements, trades

PELLEX, BigMint’s bi-weekly domestic pellet (Fe63%) index for Raipur, rose by INR 100/t ($1/t) to INR 9,600/t ($107/t) DAP on Tuesday compared to the previous assessment on 26 December. Deals for around 20,000 t were concluded by Raipur-based sellers at INR 9,400-9,500/t ($105-106/t) exw. Another deal of around 12,000 t was heard at INR 9,200/t exw a couple of days back.

Raipur-based pellet producers have increased offers for Fe 62.5% (+/-0.5) pellets by INR 100/t ($1/t) to INR 9,400-9,500/t ($105-106/t) exw. Producers such as Godawari have kept offers at INR 9,500/t ($105/t) for Fe 62.5%. The sudden spike in sponge iron and semi-finished steel offers led to the hike in pellet prices.

Meanwhile, some Odisha-based sellers offered material at higher levels of INR 9,800-10,100/t ($109-112/t) DAP in Raipur.

Market scenario

Market participants indicated that the recent rise in steel prices boosted sentiment across the value chain, prompting pellet producers to revise their offers upward. A source told BigMint: “The steel market gave strong signals, especially with the sudden price jump and decent trade volumes. This gave pellet suppliers confidence to adjust prices.”

Following the revision, buyers booked requirement-based quantities from local producers over the past couple of days. However, overall buying activity remained selective. Several buyers adopted a cautious approach, citing uncertainty over near-term price direction.

A sponge producer said, “We have covered our immediate needs. For further procurement, we are in a wait-and-watch mode to see how prices settle.”

On the supply side, pellet producers acknowledged some resistance from buyers. A supplier noted that while offers were revised upward, bid-offer disparities were observed in the market. The producer added, “Buyers are still quoting at previous price levels, whereas our revised offers reflect current market fundamentals. This gap slowed negotiations down.”

The approaching New Year holidays also impacted market activity, with many participants expecting clearer price trends only after the holiday period. Another buyer informed, “With the New Year round the corner, decision-making has slowed. Most players are postponing large-volume purchases.”

Additionally, a few buyers informed that they were adequately stocked and plan to resume procurement after the New Year. One buyer stated, “We have sufficient inventory at the moment. Fresh purchases will likely happen in early January, once there is more clarity on raw material and steel price movements.”

Rationale

• PELLEX has been derived using data points, i.e., trades, offers, and bids. To download the detailed methodology, click here.
• Three (3) deals were recorded in this publishing window, and Two (2) were taken for calculation. Thus, the T1 trade category was accorded 50% weightage.
• Thirteen (13) firm offers, bids, and indicative prices were heard. Eleven (11) were taken for price calculation and given a balance of 50% weightage.

Key market drivers

• Sponge iron prices rise w-o-w: Sponge iron prices rose by INR 700/t ($8/t) w-o-w on 29 December to INR 23,900/t ($266/t) exw-Raipur. However, prices inched up by INR 50/t ($0.5/t) d-o-d. Market participants reported that sponge iron prices edged higher on the back of spillover support from nearby markets and stronger trading activity in the prior session. Encouraged by healthy sales and improved working conditions earlier, sellers raised their offers and attempted to test higher price levels. Nevertheless, buying interest remained cautious, as many buyers had already completed their procurement in the previous session and were reluctant to purchase at elevated rates.
• Billet prices surge w-o-w: BigMint’s billet index increased by INR 1,300/t ($14/t) w-o-w to INR 39,000/t ($434/t) exw-Raipur on 26 December. Meanwhile, prices dropped by INR 100/t (1/t) d-o-d. Prices sharply rose yesterday as market sentiment remained volatile yet firmly positive, as a strong rally in finished steel prices and better offtake across the major consuming regions encouraged participants to step up bookings in the semi-finished steel segment. The sustained strength in finished steel prices boosted buyer confidence, leading to renewed optimism over near-term market stability and forward bookings at varied prices.

Outlook

According to BigMint, the pellet market in Raipur will remain cautiously optimistic, with prices supported by downstream steel strength, while trade volumes are expected to stay moderate until till the end of the New Year holiday period.