India: PELLEX remains stable amid cautious buying by steelmakers

• Raipur sellers increase pellet offers by INR 200-300/t
• Some buyers purchase material at old offers

Pellet prices in the Raipur region remained largely stable, as trading activity continued to be subdued amid cautious market sentiment. Limited deals were reported in the market, with most buyers refraining from bulk procurement and instead focusing on need-based purchases.

Trades and price movements

PELLEX, BigMint’s bi-weekly domestic pellet (Fe 63%) index for Raipur remained stable at INR 10,900/t ($113/t) DAP on Friday, compared to 7 April, Tuesday, reflecting softer market conditions. BigMint recorded deals for around 5,000 t concluded at INR 10,800/t exw Raipur by local pellet producers.

Raipur-based pellet producers kept offers for Fe 62/63% (+/-0.5%) material at INR 10,700-10,900/t ($115-117/t) exw. According to sources, a few plants kept their sales closed and fulfilled the delivery of existing deals.

Market dynamics

Market participants indicated that steelmakers have adopted a wait-and-watch approach at current price levels. According to sources, several steel producers had already secured bulk quantities at relatively lower prices earlier in the week. This has reduced their immediate procurement requirements, leading to a slowdown in fresh buying inquiries. A major mill in Raipur kept sales closed.

A steelmaker informed, “Most plants are adequately stocked for now. They are not in a rush to book additional material unless there is a clear price advantage.”

Additionally, some steelmakers are exploring cost-effective alternatives by sourcing iron ore lumps from Odisha. This shift is driven by the need to optimize raw material costs amid uncertain market conditions. A sponge iron producer added, “Lumps from Odisha and NMDC Chhattisgarh are currently offering better cost economics, which is why some plants are partially shifting their procurement strategy.”

Pellet offers from Odisha-based suppliers were heard in the range of INR 10,300-10,700/t DAP Raipur. However, buying interest for these offers remained limited. Traders highlighted that despite the availability of material from neighboring regions, buyers are hesitant to procure due to sufficient inventory levels and subdued downstream demand.

A pellet seller mentioned, “There is material available, but the appetite to buy is missing. We are keeping the same offers as iron ore suppliers NMDC and Lloyds Metals have already increased their iron ore prices recently.”

On the demand side, only sporadic deals were observed, primarily driven by immediate delivery requirements. Local plants managed to secure small quantities to meet short-term operational needs, but no significant bulk transactions were recorded.

Meanwhile, a sharp decline in sponge iron and billet prices has further dampened market sentiment. The weakening downstream segment has put additional pressure on raw material procurement decisions, as steelmakers remain cautious about building inventory at current price levels.

Rationale

• PELLEX has been derived using data points, i.e., trades, offers, and bids. To download the detailed methodology, click here.
• One (1) deal was recorded in this publishing window, and one (1) was taken for calculation. Thus, the T1 trade category was accorded 50% weightage.
• Seventeen (17) firm offers, bids, and indicative prices were heard, and Sixteen (16) were taken for price calculation and given the balance 50% weightage.

Key market drivers

• Sponge iron prices surge w-o-w: Sponge PDRI prices rose by INR 550/t ($6/t) w-o-w to INR 26,700/t ($287/t) exw Raipur, reflecting firm market momentum. Sponge iron prices in the Raipur cluster decreased by INR 350/t, as sellers introduced price corrections to stimulate demand. This led to moderate booking activity, though overall sentiment remained cautious.
• Billet prices rise w-o-w: BigMint’s billet index in Raipur remained stable w-o-w and fell by INR 150/t ($2/t) d-o-d to INR 42,950/t ($462/t) ex-works on 10 April. Market activity remained subdued, with participation constrained across both semi-finished and finished steel segments. Buyers maintained a cautious stance following recent corrections and ongoing volatility, while mixed cues from neighbouring markets further limited directional clarity.

Outlook

According to BigMint analysis, pellet prices in Raipur are expected to remain stable in the near term. Market activity is likely to stay muted, with transactions continuing on a need-based basis unless there is a significant shift in downstream steel prices or raw material dynamics.