India: PELLEX remains stable as need-based buying continues

• Trade improves after sellers reduce pellet offers
• Rising prices of lumps prompt shift to pellets

Pellet prices in the Raipur region remained largely stable over the past couple of days on 24 April, with moderate, need-based trading activity observed. Market participants noted that sellers maintained their offers and continued to transact at prevailing prices, indicating a balanced demand-supply scenario.

Trades and price movements

PELLEX, BigMint’s bi-weekly domestic pellet (Fe 63%) index for Raipur, remained stable at INR 10,400/t ($110/t) DAP on 24 April, Friday, compared to 20 April. BigMint recorded deals for around 55,000 t, concluded at INR 10,200-10,300/t ($108-109/t) exw-Raipur by local pellet producers.

Raipur-based producers kept offers for Fe 62.5/63% (+/-0.5%) pellets stable at INR 10,200-10,300/t ($108-109/t) exw today. Some Odisha-based producers offered pellets (Fe 62.5-63%) to Raipur-based buyers at INR 9,900-10,400/t ($105-110/t) DAP Raipur, but no deals were recorded in the last couple of days.

Market dynamics

According to several pellet producers, the stability in prices follows the correction seen earlier in the week, which helped revive buying interest. A pellet producer stated, “After the initial price reduction at the start of the week, we started receiving fresh inquiries. Buyers are returning to the market, though purchases are still largely need-based.”

On the demand side, buyers were actively booking limited volumes of pellets, primarily to meet immediate consumption requirements. This cautious approach is attributed to recent volatility in raw material markets.

Notably, a sharp increase in iron ore lump prices in recent NMDC and OMC auctions has lifted pellet demand. A sponge iron manufacturer said, “Lumps prices are rising significantly, so pellets are becoming relatively more attractive, leading to steady offtake.”

At NMDC Chhattisgarh’s iron ore auctions on 23 April, 46,700 t were sold of the offered 257,000 t. From Bacheli mines, 17,200-t DR CLO (10-40 mm, Fe 67%) were booked at INR 8,200/t (INR 5,950/t base price), 8,000 t-ROM (10-150 mm, Fe 65.5%) were booked at 5,340/t (INR 5,240/t base), and 130,300-t fines (Fe 60%) remained unsold. From Kirandul mines, 21,500-t fines (Fe 64%) were booked at INR 4,550/t. Prices are on FOR/FOT basis, exclusive of royalty, DMF, NMEDT.

Additionally, concerns around a potential rise in transportation costs in the near term prompted some buyers to secure volumes in advance. A steelmaker informed BigMint, “Transportation rates are expected to increase, so we are booking material ahead of time to protect our margins.” However, till now, landed costs have remained largely stable, as there has been no hike in freights.

Another market participant pointed out that the decline in pellet prices following the latest OMC auction has provided some relief to sponge iron manufacturers. A buyer mentioned, “The correction in pellet prices has eased cost pressures for us, especially when other input costs remain firm.”

Meanwhile, downstream markets such as sponge iron and billet have shown relative stability, with limited but consistent deal activity helping maintain liquidity in the market. This stability has further supported steady pellet trade volumes.

Rationale

• PELLEX has been derived using data points, i.e., trades, offers, and bids. To download the detailed methodology, click here.
• Three (3) deal was recorded in this publishing window and all were taken for calculation. Thus, the T1 trade category was accorded 50% weightage.
• Sixteen (16) firm offers, bids, and indicative prices were heard, and twelve (12) were taken for price calculation and given the balance 50% weightage.

Key market drivers

• Sponge iron prices stable w-o-w: Sponge PDRI prices remained stable w-o-w at INR 25,950/t ($276/t) exw Raipur on 24 April amid weak demand. Prices dropped by INR 200/t d-o-d today. Buying activity remained muted throughout the day, with buyers restricting procurement strictly to need-based requirements. With sufficient material already secured in earlier sessions, enquiries were limited, and trade volumes stayed subdued. Overall market sentiment remained cautious, keeping transactions largely limited.
• Billet prices remain stable w-o-w: BigMint’s billet index in Raipur rose by INR 200/t w-o-w at INR 42,050/t ($446/t) exw on 24 April. Prices fell by INR 100/t d-o-d today. Market activity remained sluggish throughout the session, with muted buying interest and limited enquiries across the semi-finished steel segment. Participants reported weaker sentiment in finished steel markets, with slower offtake discouraging fresh procurement. Buyers largely stayed on the sidelines, awaiting clearer signals on price sustainability before committing to new bookings.

Outlook

According to BigMint’s analysis, pellet prices in the Raipur region are expected to stay stable in the near term. While demand is anticipated to remain steady, significant changes in iron ore prices or freight costs could impact market direction. Overall, moderate trading activity is likely to persist, as both buyers and sellers take a cautious yet proactive approach.