India: PELLEX falls INR 100/t ($1/t) after reduction in offers; trades remain moderate

• Pellet offers fall by INR 200/t ($2/t) in Raipur
• Sponge iron and billet prices show recovery w-o-w

Pellet prices in Raipur witnessed a correction this week as local producers reduced their offers, tracking the continued weakness in downstream steel markets in the last couple of weeks. Market participants noted that buyers booked only need-based quantities at the revised levels, reflecting cautious sentiment.

Price movements, trades

PELLEX, BigMint’s bi-weekly domestic pellet (Fe63%) index for Raipur, decreased by INR 100/tonne (t) to INR 10,150/t ($115/t) DAP on 5 September 2025 compared to the previous assessment on 2 September. Around 47,000 t of deals were recorded in the Raipur market at revised offers from local suppliers.

Raipur-based pellet producers reduced their offers for Fe 63/63.5% (+/-0.5%) material by INR 200/t ($2/t) to INR 10,000-10,300/t ($113-117/t) exw a couple of days back.

No deals were recorded by Odisha-based sellers in the Raipur market. Only a few suppliers offered pellets at competitive prices compared to Raipur offers.

Market scenario

According to market sources, prices of sponge iron and semi-finished steel products have sharply declined in the past few weeks, exerting pressure on raw material demand. However, this week, sponge iron and billet prices showed some recovery in the downstream market, which led to some urgent basis deals at new prices.

A buyer mentioned, “The sharp fall in sponge iron and billet prices kept steelmakers on the sidelines. Pellet demand was present, but deals were limited to urgent requirements only. However, we are expecting some recovery in steel prices as a positive trend was seen this week.”

Pellet producers informed that a widening disparity between bid levels from buyers and their earlier offers weighed on the prices. A supplier added, “We had to reduce our offers to conclude deals, and some orders were finalized at the revised price. Market stability will depend on how downstream prices move in the coming days.”

On the supply side, market participants noted that a few Odisha-based pellet suppliers are currently under maintenance shutdown and not offering in the Raipur market. This has left buyers dependent on local producers for their requirements.

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 reported in this publishing window, and all were taken for calculation. Thus, the T1 trade category was accorded 50% weightage.
• Eleven (11) firm offers, bids, and indicative prices were heard. Ten (10) were taken for price calculation and given a balance of 50% weightage.

Key market drivers

• Sponge iron tags rise w-o-w: P-DRI prices climbed by INR 450/t ($5/t) w-o-w to INR 23,600/t ($268/t) exw-Raipur on 29 August while inching up INR 50/t d-o-d. The surge was supported by improved spot inquiries and positive sentiment following GST-related developments, which boosted buying interest.
• Billet prices up w-o-w: Billet prices in Raipur rose by INR 350/t ($4/t) w-o-w to INR 36,950/t ($419/t) exw today. Prices increased by INR 100/t ($21/t) d-o-d. Market activity and enquiries stayed muted, with buyers refraining from fresh procurement after securing sufficient volumes earlier this week. Festive-related lower activity further dampened trading momentum.

Outlook

According to BigMint, the short-term market direction of Raipur pellet prices will remain closely linked to movements in sponge iron and steel prices.

A trader added, “The market is highly volatile, and we expect prices to fluctuate further until there is some clarity on steel demand and raw material cost trends.”