India: Raipur pellet prices rise INR 200/t amid firm sponge iron, billet demand

• Raipur pellet prices extend gains on strong downstream demand
• Limited availability and firm semi-finished steel prices keep sellers bullish

PELLEX, BigMint’s bi-weekly domestic pellet (Fe 63%) index for Raipur increased by around INR 200/t w-o-w to INR 10,800/t DAP Raipur on 25 August 2026, supported by firm demand from sponge iron, pig iron and billet producers, along with higher raw material costs and constrained pellet availability.

Pellet offers also moved higher, with local sellers quoting around INR 10,600-10,700/t ($111-112/t) ex-works. Around 27,500 t of deals were reported in the Raipur market during the assessment period, indicating healthy buying activity and allowing sellers to maintain a firm stance.

Rationale

• PELLEX has been derived using data points, i.e., trades, offers, and bids. To download the detailed methodology, click here.
• Four (4) deals were recorded in this publishing window, of which two (2) were taken for calculation. Thus, the T1 trade category was accorded a weightage of 50%.
• Twenty (20) firm offers, bids, and indicative prices were heard, of which fourteen (14) were taken for price calculation and given the balance 50% weightage.

Price movements and offers

All major manufacturers in Raipur, Chhattisgarh, raised their offers for Fe 62.5/63% (+/-0.5%) grade pellets by INR 200/t to INR 10,600-10,700/t ($111-112/t) exw.

Total deals amounting to 27,500 t for Fe 62.5/63% grade pellets were reported to BigMint from Raipur-based sellers during the assessment period. The increase came amid tightening availability of iron ore lumps and fines in the region. The shortage pushed up sponge iron and billet prices, prompting producers to step up pellet procurement to maintain production levels.

Market scenario

The market has remained supported by firm downstream demand. Sponge iron, pig iron and billet producers in Raipur and neighbouring markets have continued to show buying interest, providing pellet producers with sufficient confidence to hold higher offers.

At the same time, limited inflows of pellets from neighbouring markets have tightened local availability. Monsoon-related constraints on iron ore lump supplies and moisture-related issues have further supported raw material prices and raised production costs for pellet producers.

Sellers are also relatively well booked against existing August orders, reducing pressure to offer discounts. With availability remaining controlled, producers have been able to maintain their offers despite the sharp rise in prices during August.

A Raipur-based market participant said, “Demand from sponge iron and billet producers has remained healthy, while availability from neighbouring markets is limited. Sellers are therefore comfortable holding their offers at current levels.”

Deals are, however, expected to conclude at discounts of up to around INR 100/t to prevailing offers, particularly where buyers are looking to secure larger volumes. Despite this, sellers are expected to remain firm.

As per a seller, “In Raipur, rebar prices increased by INR 200-500/t, this week recently. Lower-to-moderate buying activity was reported as buyers continued to assess higher offer levels and its sustainability.”

Market participants noted that the current rally has gained healthy momentum and is unlikely to see a major correction in the near term. However, the sharp INR 700/t increase in the recent few week frame recorded in Raipur during August could gradually prompt buyers to reassess procurement levels if downstream steel prices fail to keep pace.

Key market drivers

• Sponge iron prices rise w-o-w: Sponge PDRI prices gained by INR 750/t w-o-w to INR 28,500/t ($299/t) exw Raipur on 25 August. Prices remained firm on a d-o-d basis. Overall, the market showed strong momentum. The upward movement was mainly driven by rising coal and pellet costs, which increased input expenses and put pressure on sellers margins. As a result, sellers attempted to push offers higher.
• Billet prices increase w-o-w: BigMint’s billet index in Raipur rose by INR 350/t w-o-w to INR 40,900/t ($429/t) exw on 25 August 2026. Positive price cues from northern India further strengthened market sentiment and contributed to volatility in the Raipur market. Trading remained active across varied price levels, with a steady improvement in semi-finished steel demand supporting moderate billet bookings. However, the recovery in finished steel demand remained limited, prompting buyers to remain cautious about the sustainability of the current price rally.

Outlook

Raipur pellet prices are expected to remain firm in the near term, supported by healthy demand from sponge iron, and billet producers, elevated raw material costs and constrained iron ore lump availability. While sellers are expected to remain firm, the sustainability of the rally will depend on continued downstream demand and buyers’ ability to absorb higher pellet prices. Any signs of demand resistance could limit further gains, although a major correction appears unlikely in the immediate term.