India: Pellet trade rises 9% m-o-m in Sep’25 on robust demand

• Bulk pellet tenders help lift overall trade volume
• Sponge PDRI prices rangebound m-o-m

India’s domestic pellet trade volume increased by 9% m-o-m in September, driven by strong demand from key steelmaking clusters, stable sponge iron prices, and improved buying sentiment across major producing and consuming regions. Total recorded volumes reached approximately 1.3 million tonnes (mnt), a notable rise from 1.19 mnt in August.

The pan-India pellet market experienced a mixed trend in domestic sales, with Barbil, Bellary, Durgapur, and Jharsuguda witnessing notable hikes in trade volume during the month, reflecting renewed confidence among market participants.

Market commentary

A market participant stated, “We saw steady inquiries from sponge iron producers, especially in eastern and southern India. Raw pellet demand remained robust, and a few bulk tenders helped lift the overall traded quantity.”

The firmness in sponge iron prices during September also provided support to pellet trades. Market participants noted that steady sponge prices encouraged consistent pellet procurement to maintain production continuity. “Sponge prices remained firm throughout the month, giving buyers the confidence to restock pellets even at higher rates,” a buyer noted.

However, the total trade growth was partly capped by maintenance shutdowns in select regions such as Raigarh and Goa, where a few plants halted operations temporarily. Despite this, market participants highlighted that limited imported pellet availability kept domestic demand healthy.

A Kandla-based buyer said, “Imported pellet arrivals were quite low in September, so domestic suppliers benefitted as buyers turned inward.”

On the export front, trade activity also remained firm, with several shipments concluded from both the eastern and western coasts, further supporting overall market momentum. Meanwhile, India’s pellet export volume totalled 0.33 mnt during September compared to 0.17 mnt in the last month.

Factors driving pellet trades

• Bids drop in OMC’s Sep’25 auction: In OMC’s iron ore fines auction of 1.92 mnt (Fe 51-65%) on 19 September, around 1.674 mnt (87%) of fines were booked at INR 2,550-5,450/t. Bids (weighted average) declined by INR 350/t m-o-m; however, against base prices, bids rose by INR 50-750/t. The drop in prices was due to weak steel market sentiment, a lack of clarity regarding export duty imposition, and a reduction in iron ore prices.
• PELLEX remains firm m-o-m:  BigMint’s monthly average domestic pellet index, PELLEX, inched up by INR 75/t m-o-m in September to INR 10,275/t DAP Raipur. In September, prices in other regions increased by INR 100/t m-o-m while dropping by INR 100-200/t in Bellary, Durgapur, and Jamshedpur compared to last month.
• Sponge PDRI volatile m-o-m: Sponge PDRI prices remained stable m-o-m in INR 24,100/t exw in Raipur in September 2025. Overall, Indian sponge iron prices remained rangebound with fall in some regions Trade stayed limited amid weak finished steel demand and festive closures, but sellers held prices near production costs.
• NMDC rake movements rise y-o-y: NMDC, India’s largest iron ore miner, dispatched 440 rakes from its Chhattisgarh mines in September, equivalent to 1.69 million tonnes (mnt) of iron ore. This was an increment of 9% compared to 408 rakes (1.57 mnt) in Sep 2024, as per BigMint data.

Outlook

The domestic pellet trade is expected to experience fluctuations in trading volumes in October due to the ongoing festive season and planned plant maintenance. There may be a temporary decline in activity in Raipur, as one of the main sellers will be undergoing maintenance.