- Local producers raise pellet prices amid reduced supplies
- Sponge iron and billet prices remain supported w-o-w
PELLEX, BigMint’s bi-weekly domestic pellet (Fe 63%) index for Raipur, surged by INR 300/t to INR 9,850/t ($102/t) DAP on 21 July 2026 against 17 July.
Pellet prices in the Raipur region increased by INR 300/t in the fresh trading week, supported by higher offers from local pellet producers and a balanced supply-demand situation. The latest price movement reflects tightening availability, as maintenance shutdowns at a few pellet plants have reduced spot supply and redirected buying enquiries toward active sellers.
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 recorded in this publishing window, and thus, both were taken for calculation. Thus, the T1 trade category was accorded 50% weightage.
- Thirteen (13) firm offers, bids, and indicative prices were heard, and twelve (12) were taken for price calculation and given the balance 50% weightage.
Price movements and offers
Pellet manufacturers in Raipur, Chhattisgarh, increased offers for Fe 62.5/63% (0.5%) grade pellets by INR 300/t ($3/t) to INR 9,600-9,700/t ($100-101/t) exw. This the third hike during the month of July (till date) from Raipur pellet makers. They have increased offer by INR 600-700/t. Hike in the offer was driven by a recent improvement in demand and a short-term supply shortage due to multiple plant shutdowns.
A market participant noted that several buyers who had previously relied on Odisha iron ore lumps are now actively exploring pellet purchases following iron ore dispatch issues in Odisha. The shift in procurement preference is expected to provide additional support to pellet demand, particularly as pellets offer better operational efficiency for several sponge iron producers.
Deals for around 21,000 t of pellets were recorded by Raipur-based sellers at INR 9,700/t exw at revised offers in this publishing window.
Market scenario
Market participants said that the shutdown of a couple of pellet plants has limited material availability in the region, allowing producers to maintain firmer offers. Buyers requiring immediate cargoes have been approaching other suppliers, resulting in healthy enquiry levels despite mixed sentiment in the downstream steel market.
A Raipur-based pellet producer said, “Supply has tightened because a few plants are under maintenance, so enquiries have shifted to the operational producers. However, some buyers are still trying to negotiate at last week’s prices despite the increase in offers.”
On the demand side, buying activity remained selective. A steelmaker noted, “Sentiment in the semi-finished steel and downstream finished steel markets remained subdued during the day, restricting fresh pellet procurement. Most mills are purchasing only on a need basis.”
Several market participants also indicated that procurement decisions are being delayed as consumers await better pricing clarity following the OMC iron ore auction conducted yesterday. In the auction on 20 July, around 92% (1.52 mnt) iron ore fines were sold at largely stable bid prices compared with the previous month auction. Steelmakers informed that the auction outcome could provide a clearer direction for raw material costs in the coming days.
A trader said, “Many buyers are carrying sufficient inventory and are not in a hurry to book fresh cargoes this week. They are closely monitoring post-auction developments before making larger purchasing commitments.”
Despite cautious buying, market fundamentals continue to favour pellet producers. The combination of tighter supply, stable iron ore auction results, and need-based procurement is expected to support prices in the near term.
Key market drivers
- Sponge iron prices rise w-o-w: Sponge PDRI prices increased by INR 550/t ($6/t) w-o-w to INR 23,850/t ($248/t) exw Raipur on 21 July. Furthermore, sponge iron prices in the Raipur inched down by INR 50/t d-o-d. Demand from the finished steel segment remained subdued, with limited buying inquiries reported across key consuming regions. Weak procurement by finished steel manufacturers kept sponge iron demand under pressure, prompting buyers to resist higher offer prices.
- Billet prices increase w-o-w: BigMint’s billet index in Raipur rose by INR 300/t ($3/t) w-o-w to INR 37,900/t ($394/t) exw on 21 July. Additionally, the index decreased by INR 200/t d-o-d, as buying interest in the semi-finished steel market remained limited amid slow finished steel demand and rainfall in the region. Sellers were forced to reduce offers to attract buyers.
Outlook
BigMint expects Raipur pellet prices to remain firm throughout this week, with trading likely to continue on a need-based basis unless there is a significant change in steel demand or raw material availability.
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