India: PELLEX remains firm as sellers maintain offers

• Sharp uptick in steel prices prompt stable pellet offers
• Need-based trading observed despite multiple inquiries

Pellet prices in Raipur remained firm on 3 April against the last assessment on Tuesday (31 March), supported by steady offers from producers. The stability comes amid a sharp uptick in downstream steel prices, driven by rising raw material costs such as coking coal and silico manganese. However, demand has yet to pick up meaningfully, keeping overall market sentiment cautious.

Price movements

PELLEX, BigMint’s bi-weekly domestic pellet (Fe 63%) index for Raipur, stood at around INR 10,650/t DAP on 3 April, stable against 31 March.

Offers for Fe 62.5-63% (+/-0.5%) grade pellets were heard in the range of INR 10,500-10,700/t exw Raipur, translating to around INR 10,650/t DAP. Deals for around 30,000 t were recorded during the assessment window.

Additionally, a few deals for 15,000 t of pellets (Fe 62.5%) from Odisha were heard landing in Raipur at around INR 10,300/t DAP, offering a competitive alternative for buyers.

Market dynamics

Pellet prices in Raipur remained stable, with participation seen from both buyers and sellers. Several inquiries were heard in the market; however, most buying continued to be need-based, with limited conversion into firm deals. Overall activity suggested a balanced market, where steady offers from sellers were met with cautious procurement from buyers.

A Raipur-based seller notes, “Offers have been maintained for now. Enquiries are present, but buying interest is still not very aggressive.”

Another seller said, “Offers were held steady in expectation of some improvement in bookings with the start of the new financial year, although volumes remain limited.”

Buyers remained cautious, with market participants waiting for clearer direction from the raw material segment.

A buyer said, “We are waiting for NMDC’s price revision to assess the market better. Some support is being seen from sponge and billet prices, but demand is still slow.”

A steelmaker highlighted, “Pockets of trades are happening, but overall buying remains largely need-based, with no aggressive activity.”

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 recorded in this publishing window and taken for calculation. Thus, the T1 trade category was accorded 50% weightage.
• Fourteen (14) firm offers, bids, and indicative prices were heard and thirteen (13) were taken for price calculation and given balance 50% weightage.

Key market drivers

• Sponge iron prices rise w-o-w: Sponge PDRI prices rose by INR 1,450/t w-o-w to INR 27,250/t exw Raipur. Sponge iron prices in the Raipur cluster increased by INR 200/t d-o-d, supported by improved bookings during the latter part of the session. Sellers raised spot offers in response to better enquiry levels, although overall buying remained measured.
• Billet prices rise w-o-w: BigMint’s billet index in Raipur surged by INR 2,000/t w-o-w, while prices inched up by INR 100/t d-o-d to INR 42,950/t ex-works on 3 April supported by improved buying interest and a pickup in enquiries during the latter half of the trading session. Cautious optimism in the finished steel segment provided some support to spot offers.

Outlook

Pellet prices are expected to remain firm in the next few days, as market participants resume procurement following the start of the new financial year. While regular purchasing activity is likely to continue, price direction will depend on raw material trends and demand recovery in the downstream steel segment.