India: PELLEX rises by INR 200/t ($2/t) following active bulk trades in Raipur

• Raipur producers hike pellet offers by INR 200/t
• Monsoon restocking keeps buying interest aggressive

PELLEX, BigMint’s bi-weekly domestic pellet (Fe 63%) index for Raipur, rose by INR 200/t to INR 9,100/t ($96/t) DAP on 23 June against 19 June.

Pellet prices in the Raipur cluster have increased by INR 200/t this week following strong trading activity witnessed at reduced price levels last week. The price recovery comes after buyers aggressively booked material, considering the recent correction as an attractive procurement opportunity ahead of the monsoon season.

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 one (1) was taken for calculation. Thus, the T1 trade category was accorded 50% weightage.
• Fifteen (15) firm offers, bids, and indicative prices were heard, and Fourteen (14) were taken for price calculation and given the balance 50% weightage.

Price movements and offers

Pellet makers in Raipur raised offers for Fe 62.5/63% (0.5%) grade by INR 200/t ($2/t) to INR 8,900-9,000/t ($94-95/t) exw on 22 June. Producers revised offers upward, supported by active procurement and the onset of the monsoon.

Meanwhile, BigMint recorded around 40,000 t of deals during the current publishing window at INR 8,800-9,000/t exw Raipur.

Raipur-based buyers concluded nearly 200,000 t of transactions last week when prices had declined to their lowest levels in over a year. The substantial buying interest provided support to the market and encouraged producers to revise their offers upward.

Market scenario

Pellet manufacturers stated that they increased their offers after successfully selling decent volumes at previous price levels. Some sellers indicated that they are currently limiting fresh sales following the recent trading rally and are evaluating market direction before announcing further offers.

A buyer said, “Pellet prices may have reached their bottom, prompting aggressive restocking by sponge iron and steelmakers ahead of monsoon. Firm iron ore fines prices and expectations of improved demand during the rainy season encouraged market participants to secure volumes at lower levels.”

Another sponge iron producer said, “Raipur-origin pellets remained more competitive compared to supplies from neighbouring regions. Immediate material availability and attractive pricing led to a surge in buying activity after two to three weeks of subdued trading conditions.”

Despite the recent recovery in pellet prices, market sentiment remains cautious. Market participants pointed out that the sponge iron and semi-finished steel markets have remained weak over the past week, which could limit aggressive pellet procurement in the near term. The subdued downstream steel market continues to weigh on overall demand expectations.

NMDC Chhattisgarh’s iron ore auctions saw 27,200 t booked on 18 June. From Bacheli, 21,500 t of DR CLO (10-40 mm, Fe 67%) were booked at INR 6,600/t (INR 250/t premium), while 6,000 t of lumps (10-20 mm, Fe 65.5%) were sold at base prices of INR 5,850/t. Entire 81,200-t fines remained unsold. However, entire 71,600-t fines saw no response from buyers in Kirandul. Prices are exclusive of royalty, DMF, and NMEDT.

Key market drivers

• Sponge iron prices fall w-o-w: Sponge PDRI prices dropped by INR 150/t ($1.5/t) w-o-w t0 INR 23,900/t ($250/t) exw Raipur on 23 June. However, prices in Raipur remained stable d-o-d. Sellers reduced offers to stimulate enquiries and secure bookings; however, buyer participation remained largely restricted to immediate requirements, keeping market sentiment under pressure. Procurement activity across regions remained predominantly need-based, with the absence of bulk transactions reflecting cautious purchasing strategies and limited confidence in near-term demand recovery.
• Billet prices down w-o-w: BigMint’s billet index in Raipur inched down by INR 100/t ($1/t) w-o-w to INR 38,700/t ($402/t) exw on 23 June. Additionally, the index decreased  by INR 50/t d-o-d. Market participants noted that enquiries were limited and mostly focused on securing lower prices, prompting some mills to reduce offers to attract bookings. Meanwhile, weak cues from neighbouring markets and continued softness in finished steel prices kept pressure on the semi-finished steel segment, resulting in a cautious and bearish market sentiment.

Outlook

Pellet prices are expected to remain firm in the short term, supported by recent transactions, stronger buyer sentiment, and the possibility of maintenance shutdowns at a key plant during July. These factors are likely to keep supply relatively tight and provide support to prices in the coming weeks.