India: PELLEX rises INR 200/t ($2/t) on tight availability

• Material shortage supports further price hike
• Buyers resist higher levels amid limited trade activity

PELLEX, BigMint’s bi-weekly domestic pellet (Fe 63% ± 0.5%) index for Raipur, increased by INR 200/t ($2/t) to INR 11,800/t ($122/t) DAP Raipur on 6 October 2026 as compared to the last assessment on 1 October. The latest increase was primarily driven by tight pellet availability in the region, while firm sponge iron and finished steel demand provided additional support to sellers. However, few sellers are still keeping offer at around 11,400-11,500/t exw.

However, trading activity remained limited at the higher price levels, with buyers finding the prevailing prices unviable for procurement and preferring to wait for some correction.

Rationale

• PELLEX has been derived using data points, i.e., trades, offers, and bids. To download the detailed methodology, click here.
• Zero (0) deals were recorded in this publishing window of which none were taken for calculation. Thus, the T1 trade category was accorded a weightage of 0%.
• Sixteen (16) firm offers, bids, and indicative prices were heard, of which fourteen (14) were taken for price calculation and given the balance 100% weightage.

Price movements and offers

Pellet manufacturers in Raipur, Chhattisgarh, increased offers further for Fe 62.5/63% (+/-0.5%) grade pellets by INR 300/t ($3/t) to INR 11,700-11,800/t ($121-122/t) ex-works on 5 October. This marks third hike and almost INR 900/t hike in the last ten days.

The latest increase was supported by increased semis and long product prices announced by the primary steel mills for October delivery.

Spot availability has also remained constrained. Some Raipur-based pellet sellers are under maintenance shut down led the shortage in the market. Also, due to monsoon-related disruptions and a landslide on 25 September, halted NMDC dispatches and led to pending movements. Dispatches are expected to normalize this week.

Market scenario

A market participant said the recent price increase is largely a result of limited pellet availability, with some plants under maintenance and others holding back sales. At the same time, sustained demand from sponge iron producers has allowed sellers to push prices higher.

Another trader said the shortage of iron ore fines amid monsoon-related logistical issues has affected pellet production. He expects pellet prices to soften once raw material availability improves and pellet production returns to normal levels.

On the buying side, a buyer said the current price levels are not viable for procurement and that they are adopting a wait-and-watch approach in anticipation of a correction.

However, sellers remain relatively confident about the current price levels. According to market participants, tight availability of iron ore lumps is also supporting the broader raw material market.

Key market drivers

• Sponge iron prices increase w-o-w: Sponge PDRI prices stood at INR 29,350/t ($305/t) exw Raipur on 6 October, up by INR 50/t ($0.5/t) w-o-w from 29 September. Buyer participation remained largely need-based, while weak finished steel demand and the absence of major bulk buying in the semi-finished and finished steel segments kept market sentiment subdued. Elevated pellet and non-coking coal prices continued to weigh on sponge iron margins, limiting sellers’ scope for price cuts. Although healthy enquiries on the previous day had improved market sentiment, actual trading activity remained limited today amid cautious buying.
• Billet prices inch higher w-o-w: BigMint’s billet index in Raipur increased by INR 500/t ($5/t) w-o-w to INR 45,750/t ($475/t) exw on 6 October 2026 against 29 September, supported by limited material availability and tighter supply despite subdued demand. Market activity remained slow amid weak sentiment in the semi-finished steel segment, while finished steel producers raised spot offers in anticipation of improved buyer interest. However, end-user enquiries and actual demand remained weak, keeping trading activity muted.

Outlook

Raipur pellet prices are expected to remain firm in the near term, supported by tight spot availability and elevated sponge iron and billet prices. However, a sustained correction in sponge iron and billet prices, along with improved dispatches and fines availability, could ease supply constraints and put downward pressure on pellet prices.