India: PELLEX increases by INR 300/t ($3.5/t) amid moderate trades; market eyes OMC auction outcome

• Shortage of iron ore supports pellet prices
• Billet prices increase by INR 250/t w-o-w

Pellet prices in the Raipur region continued their uptrend this week, supported by tight availability of iron ore fines and a recent hike in OMC’s base prices.

Price movements, trades

PELLEX, BigMint’s bi-weekly domestic pellet (Fe63%) index for Raipur, rose by INR 300/tonne (t) ($2/t) to INR 10,400/t ($119/t) DAP on 19 August 2025 compared to the previous assessment on 14 August.

Raipur-based producers increased their offers for Fe 63% (+/-0.5%) to INR 10,200-10,300/t ($117-118/t) exw, though some producers were still not offering, as they were waiting for price corrections. Deals for around 55,000 t were concluded over the last couple of days by local pellet suppliers at the revised offers. Sales closures were highlighted by selected Raipur-based suppliers.

Market scenario

The rally in pellet prices has been in line with billet tags, reflecting positive market sentiment across the region. Market participants noted that while buyers have already booked sufficient quantities –slowing fresh bookings — the overall sentiment remains bullish.

Some trades were also heard from Odisha, where competitive offers attracted interest from Raipur-based buyers. However, according to a steelmaker, despite Odisha’s attractive pricing, factors such as freight costs and quality continued to make local procurement more feasible for many.

Meanwhile, attention is focused on OMC’s upcoming iron ore auction scheduled for 19 August, where 2.395 mnt of material will be offered, including 0.902 mnt of lumps and 1.493 mnt of fines. OMC has raised base prices by INR 300/t for fines and INR 350/t for lumps on a m-o-m basis, citing seasonal demand, supply constraints, and disrupted dispatches due to heavy monsoon rains.

NMDC conducted an auction for 25,200 t (10-40 mm, Fe 67%) of iron ore from its Bacheli mines on 14 August. Around 8,000 t of Baila-sized lumps (10-20 mm, Fe 65.5%) were booked at INR 6,899/t (9.5% premium) and 17,200 t of DR CLO (10-40 mm, Fe 67%) at INR 7,428/t (7.5% premium). Prices were on FOR basis, inclusive of royalty, DMF, and NMET.

Rationale

• PELLEX has been derived using data points, i.e., trades, offers, and bids. To download the detailed methodology, click here.
• Two (2) deals were reported in this publishing window, and both were taken for calculation. Thus, the T1 trade category was accorded 50% weightage.
• Twelve (12) firm offers, bids, and indicative prices were heard. Eight (8) were taken for price calculation and given a balance of 50% weightage.

Key market drivers

• Sponge iron tags inch down w-o-w: P-DRI prices edged down by INR 50/t ($1/t) w-o-w to INR 24,400/t ($280/t) exw-Raipur on 19 August. However, market sentiment remained cautiously optimistic. Participants are now watching raw material price trends and regional demand-supply movements for further cues.
• Billet prices rise w-o-w: Billet prices in Raipur increased by INR 250/t ($2.5/t) w-o-w to INR 37,800/t ($434/t) exw today while rising by INR 100/t ($1-2/t) d-o-d too. Market activity picked up, as trading resumed after the long weekend holidays. Anticipation of further price gains encouraged buyers to step in, resulting in a surge in bookings and active participation across markets.

Outlook

Looking ahead, pellet prices in Raipur are likely to stay firm in the near term, supported by tight iron ore availability, higher OMC base prices, and positive market sentiment from billet and sponge iron trends. However, the outcome of the upcoming OMC auction will be reflect in the market in next couple of days and pricing will take a new momentum.