India: PELLEX drops by INR 400/t ($4/t) with bulk trades ahead of monsoon

• Raipur producers reduce pellet offers by INR 400/t
• Around 140,000 t deals in Raipur by local plants

PELLEX, BigMint’s bi-weekly domestic pellet (Fe 63%) index for Raipur, decreased by INR 400/t to INR 8,900/t ($94/t) DAP on 19 June against 16 June.

Pellet prices in the Raipur region witnessed a sharp correction of INR 300-400/t this week after local pellet manufacturers reduced their offers by around INR 400/t a few days ago. The price decline attracted strong buying interest from steelmakers, resulting in significant bulk trade activity across the market.

Rationale

• PELLEX has been derived using data points, i.e., trades, offers, and bids. To download the detailed methodology, click here.
• Five (5) deals were recorded in this publishing window and were taken for calculation. Thus, the T1 trade category was accorded 50% weightage.
• Twelve (12) firm offers, bids, and indicative prices were heard, and ten (10) were taken for price calculation and given the balance 50% weightage.

Price movements and offers

Raipur-based pellet producers reduced their offers for 62.5/63% (+/-0.5%) grade pellets by INR 400/t ($4/t) to INR 8,700-8,800/t ($92-93/t) exw on 16 June. Pellet prices fell to around a one-year low, matching levels last seen in Jul’25. The decline was driven by inventory pressure, with steelmakers remaining cautious and showing a preference for iron ore lumps. Weak steel margins and subdued steel sales also pressured pellet demand.

BigMint recorded nearly 140,000 tonnes of pellet transactions were concluded by Raipur-based pellet producers over the last couple of days at INR 8,700-8,800/t exw. The deals were primarily driven by steelmakers seeking to secure raw material inventories ahead of the upcoming monsoon season.

Market scenario

A pellet producer stated, “Revised offers triggered a flood of buying inquiries from consumers. The current price levels are among the lowest seen in the past year, encouraging buyers to enter the market aggressively. The producer added that multiple bulk deals were finalized shortly after the offer revisions due to the strong response from customers.”

On the demand side, a steelmaker commented that the recent correction may represent the bottom level for pellet prices before the onset of monsoon-related supply disruptions. The buyer noted that iron ore fines availability is expected to tighten during the rainy season, which could eventually support a recovery in pellet prices. As a result, several consumers have started replenishing inventories at the current levels.

Another market participant highlighted, “Pellet supplies from Odisha are presently not economically viable for Raipur-based consumers due to freight costs and overall landed prices. Consequently, local pellet manufacturers are offering more attractive pricing, leading buyers to prefer regional suppliers.”

Meanwhile, market sentiment remains cautious as participants await the outcome of today’s iron ore auction conducted by the Odisha Mining Corporation (OMC). Several buyers indicated that the auction results will provide further direction to raw material costs and pellet pricing trends.

Key market drivers

• Sponge iron prices stable w-o-w: Sponge PDRI prices remain stable w-o-w at INR 24,150/t ($253/t) exw Raipur on 19 June. However, prices in Raipur declined by INR 50/t d-o-d amid limited buying activity and cautious sentiment in the market. Participants reported weak response from buyers across the region, which kept overall trading activity subdued.
• Billet prices rise w-o-w: BigMint’s billet index in Raipur rose by INR 200/t ($2/t) w-o-w to INR 38,950/t ($405/t) exw on 16 June. Additionally, the index inched down INR 50/t d-o-d. Sellers attempted to hold prevailing price levels despite subdued market conditions; however, buyers largely refrained from procuring material at higher rates amid weak finished steel demand. Market participants noted that buyers are awaiting improvement in downstream offtake before committing to fresh billet bookings.

Outlook

Although clarity on future price movements is expected after the auction, the substantial volume of deals concluded in recent days, coupled with stable sponge iron prices, may help keep pellet prices firm in the near term.