- Tight high-grade fines supply boosts pellet prices
- Falling sponge PDRI, billet tags weigh on pellet bids
Pellet prices in the Raipur region witnessed a notable increase mid-week, driven by a combination of strong seasonal demand and reduced availability of iron ore fines. Local pellet producers raised offers, supported by heightened buying interest as monsoon-related challenges influenced market behaviour.
Price movements, trades
PELLEX, BigMint’s bi-weekly domestic pellet (Fe63%) index for Raipur, rose by INR 200/t to INR 9,700/t ($112/t) DAP on 18 July 2025 compared to the previous assessment on 15 July.
Raipur-based pellet producers raised their offers for 63% (+/-0.5%) material by INR 200/t ($2.5/t) to INR 9,500-9,700/t ($110-112/t) exw. The increase follows a recent rise in the base prices for the iron ore auction from the Odisha Mining Corporation (OMC) and strong seasonal demand due to the monsoon. The limited availability of fines also bolstered raw pellet prices.
A pellet producer based in Durg finalised deals for around 40,000-50,000 t at INR 9,300/t exw a couple of days ago. Deals from Raipur-based pellet sellers have remained unconfirmed for the past few days.
Pellet (Fe 62.5-63%) offers from Odisha for Raipur were heard at INR 9,300-9,800/t ($108-114/t) DAP.
Market scenario
Market participants attributed the price hike to increased preference for pellets over iron ore lumps during the monsoon season. A steelmaker informed BigMint, “During rains, lumps are prone to moisture, which affects productivity. That is why buyers are opting for pellets despite the higher cost.” This seasonal shift in preference has amplified demand in the region.
Adding to the price momentum, supply concerns have emerged in central and eastern India due to tightened availability of high-grade iron ore fines, further pushing pellet prices upward. The recent hike in base prices by OMC for its 19 June auction also played a crucial role in shaping price expectations. A pellet supplier stated, “OMC’s base price hike has set a strong tone in the market, and pellet producers are factoring that into their offers.”
However, the uptick in pellet prices has not translated into similar movements in downstream products such as sponge iron (PDRI) or billets. A sponge producer observed, “Sponge and billet prices are not increasing in sync, so some buyers are cautious and keeping their bids lower.”
With the market closely eyeing the upcoming OMC auction results, participants expect price clarity and potential deal finalisations in the coming week. Until then, Raipur’s pellet market is expected to remain volatile.
Rationale
- PELLEX has been derived using data points, i.e., trades, offers, and bids. To download the detailed methodology, click here.
- No deal was reported in this publishing window. Thus, the T1 trade category was accorded 0% weightage.
- Fifteen (15) firm offers, bids, and indicative prices were heard. Twelve (12) were taken for price calculation and given a balance of 100% weightage.
Key market drivers
- Sponge iron tags fall w-o-w: P-DRI prices rose by INR 200/t ($2.5/t) w-o-w to INR 23,700/t ($275/t) exw-Raipur on 18 July. Meanwhile, prices saw a rise of INR 200/t ($1/t) d-o-d today. Trades were largely subdued as end users are waiting for some improvement in market sentiments.
- Billet prices decline w-o-w: Billet prices in Raipur dropped by INR 150/t ($2/t) w-o-w to INR 36,700/t ($426/t) exw today. Prices remained unchanged d-o-d. The market saw mild volatility throughout the day. Although semi-finished steel demand picked up slightly, bookings remained limited and scattered, with participants continuing to operate conservatively.
Outlook
The outlook remains uncertain, with volatility expected in the near term due to the OMC auction. The market is likely to gain price clarity next week after the OMC auction, and participants will revise their strategies based on the bids received during the auction.
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