India: PELLEX remains firm amid mixed market sentiments

• PDRI, billet prices fall INR 450-600/t w-o-w
• Market awaits OMC auction for price clarity

Pellet prices in the Raipur region remained firm in recent deals concluded by local suppliers. Stable offers from Raipur-based pellet plants kept the market steady this week. Buyers, however, were mostly seen placing orders on a requirement basis, aligning pellet purchases with sponge iron demand while also exploring alternative sourcing options.

Price movements, trades

PELLEX, BigMint’s bi-weekly domestic pellet (Fe63%) index for Raipur, remained unchanged at INR 10,100/t ($115/t) DAP on 12 August 2025 compared to the previous assessment on 8 August.

Raipur-based producers maintained their offers for Fe 63% (+/-0.5%) at stable levels of INR 9,900-10,000/t ($113-114/t) exw. Deals for around 30,000 t were concluded over the last couple of days by local pellet suppliers on a need basis.

Pellet (Fe 62.5-63%) offers from Odisha for Raipur were heard at INR 9,700-10,200/t ($111-116/t) DAP. Around 5,000 t of pellets were booked by a Raipur buyer from Odisha at INR 9,700/t DAP.

Market scenario

Market activity softened due to a decline in sponge and billet prices, reflecting slightly weaker sentiments across the steel value chain. A buyer stated, “We are cautious in booking large quantities right now, as sponge prices have softened, and we want to time our purchases better.”

Furthermore, another buyer indicated that demand was strong in the market, as steelmakers currently prefer pellets to iron ore lumps. However, due to weak finished steel demand and pricing, purchasing activity was cautious.

Some trades were also seen from Odisha, where competitive pricing attracted interest from some Raipur-based buyers. A steelmaker observed, “Odisha’s offers are tempting, but freight and quality considerations still make local procurement a viable option for many.”

Meanwhile, sponge producers with sufficient raw material inventories are in a wait-and-watch mode ahead of the Odisha Mining Corporation (OMC) auction, likely to be scheduled next week. Market participants are closely monitoring the expected base price announcement from OMC, which could influence short-term procurement strategies.

Sources suggest prices may remain range-bound in the immediate term but could fluctuate in the coming days depending on auction outcomes. A Raipur-based pellet producer commented, “We expect trades to continue on a need basis, but any significant movement will depend on OMC’s pricing and the broader sentiment in sponge iron and billet markets.”

Rationale

• PELLEX has been derived using data points, i.e., trades, offers, and bids. To download the detailed methodology, click here.
• Three (3) deals were reported in this publishing window, and two (2) were taken for calculation. Thus, the T1 trade category was accorded 50% weightage.
• Sixteen (16) firm offers, bids, and indicative prices were heard. Fourteen (14) were taken for price calculation and given a balance of 50% weightage.

Key market drivers

• Sponge iron tags fall w-o-w: P-DRI prices fell by INR 600/t ($7/t) w-o-w to INR 24,350/t ($278/t) exw-Raipur on 12 August. Meanwhile, prices decreased by INR 150/t ($2/t) d-o-d today. Buyer inquiries remained scarce, reflecting an inactive trading environment and limited market participation. Sellers attempted to stimulate buying interest through price corrections in select pockets, but these efforts failed to generate meaningful buying momentum.
• Billet prices drop w-o-w: Billet prices in Raipur decreased by INR 450/t ($5/t) w-o-w to INR 37,550/t ($428/t) exw today while falling INR 200/t ($2.5/t) d-o-d too. Trading activity slowed further, with spot offers coming under pressure amid persistent weakness in both the semi-finished and finished steel segments. Buying was largely restricted to immediate requirements, as participants adopted a cautious stance amid bearish market sentiment.

Outlook

Pellet prices are expected to remain firm for this week, backed by need-based demand. However, the market will gain better clarity about tradable levels following the revision in iron ore prices post the OMC auction next week.