India: Raipur pellet prices climb INR 200/t with limited deals

• Raipur pellet makers hike offers further 
• Fast rally and cautious buying raise concerns over sustainability

PELLEX, BigMint’s bi-weekly domestic pellet (Fe 63%) index for Raipur increased by around INR 200/t w-o-w to INR 11,000/t DAP Raipur on 1st September 2026. The rise was supported by a broad-based increase in pellet prices across major domestic markets, along with firm sponge iron, pig iron and billet prices during the assessment period.

Pellet offers in Raipur also increased, with local sellers quoting around INR 10,800-10,900/t ($113-114/t) ex-works. However, buying activity weakened noticeably, with only around 5,000 t of deals reported during the assessment period as buyers remained cautious following the sharp rise in prices. Buyers were largely targeting around INR 10,500-10,800/t ex-works, below prevailing seller expectations.

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 was taken for calculation. Thus, the T1 trade category was accorded a weightage of 50%.
• Thirteen (13) firm offers, bids, and indicative prices were heard, of which eleven (11) were taken for price calculation and given the balance 50% weightage.

Price movements and offers

All major pellet manufacturers in Chhattisgarh increased their offers for Fe 62.5/63% (+/-0.5%) grade pellets by around INR 200/t .

Around 25,000 t pellet deals were reported to BigMint during the assessment period, significantly lower than other markets. The decline in concluded volumes reflected increased buyer resistance following the rapid price escalation.

The latest increase also came despite the resumption of operations at another major Raipur pellet plant after a shutdown of around 30-45 days. Although additional supply has entered the market, availability remains manageable, while higher prices in neighbouring markets have reduced the incentive for suppliers to divert material into Raipur.

Market scenario

The Raipur pellet market continued to witness upward price momentum during the assessment period, with prices rising across several major domestic markets, including Barbil, Kandla, Jharsuguda and Chandrapur. The broad-based rally provided local pellet producers with sufficient confidence to raise offers.

However, the market response on the demand side has been comparatively subdued. Sponge iron and billet prices remained firm, but buying interest from downstream consumers has softened slightly in recent sessions. The sharp increase in pellet prices over a short period has left buyers with limited time to adjust to higher replacement costs.

A Raipur-based seller informed BigMint that pellet prices could potentially move towards INR 11,000/t ex-works Raipur amid the current rally. However, the participant noted that actual bookings remained thin, with inquiries lower than the previous week.

Meanwhile, higher pellet prices in neighbouring markets have supported local availability dynamics. With several surrounding markets also witnessing price increases, particularly Barbil, material inflows into Raipur have become less economical. This has allowed local producers to maintain elevated offers despite the return of some pellet-making capacity.

Monsoon-related constraints on iron ore lump availability and moisture-related issues have continued to support raw material costs. Higher sponge iron and coking coal prices across several regions have also strengthened the cost basis for pellet producers.

Key market drivers

• Sponge iron prices rise w-o-w: Sponge PDRI prices gained by INR 850/t w-o-w to INR 29,350/t ($309/t) exw Raipur on 1 September. Prices declined by INR 250/t on a d-o-d basis. Overall, the market showed strong momentum. Market participants remained in a wait-and-watch mode, while bulk trading activity continued to remain subdued. Buyers were cautious about making larger commitments amid expectations of further price corrections. Sellers, meanwhile, were also seen reducing offers slightly, but aggressive price cuts were largely avoided as some had already booked material and were reluctant to chase the declining market.
• Billet prices increase w-o-w: BigMint’s billet index in Raipur rose by INR 1,200/t w-o-w to INR 42,100/t ($443/t) exw on 1 September 2026. Elevated production costs prevented producers from reducing offers further, while buyers remained reluctant to book material at prevailing levels, resulting in limited spot transactions. Market activity remained subdued, although a few bookings were concluded for neighbouring markets at favourable prices, as per sellers.

Outlook

Raipur pellet prices are expected to remain supported in the near term by firm sponge iron, billet and raw material prices. However, weaker buying and lower deal volumes may lead to discounts of around INR 100-200/t, with a marginal correction possible if downstream demand softens further. The near-term direction will depend on whether buyers accept current levels around INR 11,000/t.