- Firm sponge iron, billet prices support pellet demand
- Pellets gain preference amid iron ore dispatch issues in Odisha
PELLEX, BigMint’s bi-weekly domestic pellet (Fe 63%) index for Raipur, inched up by INR 50/t to INR 9,550/t ($99/t) DAP on 17 July 2026 against 14 July.
Pellet prices in the Raipur region remained firm over the past couple of days, driven by improving buying interest and tightening supply. Market participants said procurement activity has gradually picked up, with buyers returning to the market on a need basis after remaining cautious in the past few weeks.
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.
- Fourteen (14) firm offers, bids, and indicative prices were heard, and eleven (11) were taken for price calculation and given the balance 50% weightage.
Price movements and offers
Pellet producers in Raipur kept offers for Fe 62.5/63% (0.5%) grade pellets stable at INR 9,300-9,400/t ($97-98/t) exw. Amid improving demand, most Raipur-based pellet producers maintained their existing offers. However, a few sellers have temporarily suspended sales, opting to monitor market developments before entering new negotiations.
Deals for around 21,000 t of pellets were recorded by Raipur-based sellers at INR 9,400/t exw in this publishing window. Higher sponge iron and semi-finished steel prices kept the trading session active today.
Market scenario
A pellet producer said that inquiries have improved noticeably over the last few days, while pending dispatch commitments have limited the availability of fresh cargoes. According to the producer, existing order backlogs have allowed manufacturers to maintain firm offers without facing significant pressure to negotiate prices.
Supply conditions have also tightened following maintenance shutdowns at a couple of pellet plants in the region. In addition, one producer is currently utilising most of its production for captive consumption, reducing merchant availability in the spot market. Market participants believe these factors have restricted fresh supplies and lifted prices.
On the demand side, sentiment received additional support after sponge iron and billet prices moved higher today. A sponge iron buyer said the latest increase in semi-finished steel prices has improved confidence across the value chain, encouraging pellet consumers to replenish inventories before prices move further upward.
Another 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.
Meanwhile, traders expect pellet prices to rise further in the near term. Participants attributed the positive outlook to ongoing supply constraints and active pellet export transactions from India’s east coast, which continue to absorb merchant volumes.
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 23,550/t ($245/t) exw Raipur on 17 July. Furthermore, sponge iron prices in the Raipur cluster increased by INR 350/t d-o-d, backed by revived buying interest and a significant increase in restocking activity by billet producers. Improved procurement, combined with firm sentiment in the billet market, enabled producers to raise offers during the session.
- Billet prices increase w-o-w: BigMint’s billet index in Raipur rose by INR 200/t ($2/t) w-o-w to INR 37,800/t ($393/t) exw on 17 July. Additionally, the index increased by INR 250/t d-o-d, supported by improved buying interest and a sharp increase in bookings across the semi-finished steel segment. Stronger procurement in both billet and sponge iron helped firm spot prices, which made a recovery after an extended period of subdued market activity.
Outlook
BigMint understands that the combination of stronger downstream steel prices, tightening regional supplies, and improving procurement activity has shifted sentiment in favour of pellet producers. Therefore, unless supply conditions improve significantly, we expect the Raipur pellet market to remain firm, with the possibility of further price increases in the coming sessions.
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