India: PELLEX remains stable amid moderate deals

• Pellet offers remain stable in Raipur, up in Odisha
• Sponge iron prices stable, billet rises INR 400/t w-o-w

Pellet prices in Raipur remained stable in this trading week despite a slight uptick in Odisha pellet prices. The rise in Odisha prices was driven by higher bids in the recent OMC auction and supportive market sentiments from the sponge iron and semi-finished steel sectors. However, trading activity in Raipur is yet to gain momentum as buyers remain cautious.

BigMint’s bi-weekly domestic pellet (Fe63%) index remained stable at INR 9,800/t ($113/t) DAP Raipur on 25 February 2025 compared to the previous assessment on 21 February. In this publishing window, post OMC auction, around 13,000 t of pellet (Fe62.5/63%) deals were recorded in Raipur at INR 9,650-10,050/t ($111-115/t) DAP by the local and Odisha-based pellet plants.

Pellet offers in Raipur for Fe63% (+/- 0.5%) remained stable at INR 9,700-9,900/t ($112-114/t) exw over the past couple of days. A few plants have raised their offers but buyers showed no interest.

Most buyers are only procuring material as per immediate requirements and avoiding bulk purchases due to uncertain market conditions.

A Raipur-based buyer informed, “Demand for pellets remained weak as some sponge iron producers opted for NMDC DRCLO to operate their plants. Inquiries for raw pellets were moderate, with some buyers preferring Odisha-based suppliers due to competitive pricing.”

Meanwhile, the increased bids in the OMC auction have led to higher offers in Odisha, as production costs continue to rise. An Odisha-based producer offered raw pellets in Raipur at INR 9,400-9,850/t ($108-113/t) DAP Raipur with some trades concluded.

A local steelmaker commented: “Sponge iron prices have remained stable over the last week, while billet prices saw a rise of INR 400-500/t ($5-6/t) leading to growth in market confidence but raw materials are yet to gain in terms of physical deals.”

In today’s NMDC iron ore auction from Chhattisgarh, 193,500 t of fines (Fe64%) remained unsold.

Market activities are expected to remain rangebound, with prices likely to stay firm if finished steel prices see an uptick. On the other hand, NMDC’s iron ore price revision can be expected in the coming days.

Rationale

• PELLEX has been derived using data points, i.e., trades, offers, and bids. To download the detailed methodology, click here.
• Three (3) deals have been reported so far in this publishing window and two (2) were taken for calculations. The T1 trade category was accorded 50% weightage.
• Sixteen (16) firm offers, bids, and indicative prices were heard. Thirteen (13) were taken for price calculation and given the balance 50% weightage.

Factors impacting pellet prices

• Sponge iron tags stable w-o-w: P-DRI prices remained largely stable w-o-w at INR 24,700/t ($283/t) exw-Raipur on 25 February. However, prices decreased by INR 150/t ($2/t) d-o-d today. Prices declined today as buyers remained quiet following yesterday’s solid buying. In the meantime, bids declined as buying interest weakened.
• Billet prices rise w-o-w: Billet prices in Raipur rose by INR 400/t ($5/t) w-o-w to INR 39,550/t ($454/t) exw today. Furthermore, d-o-d, prices declined by INR 250/t ($3/t). Trades remained muted in today’s trading session amid cautious buying interest.

Outlook

According to BigMint’s analysis, pellet prices in Raipur may remain volatile amid the uncertain sentiments. The steelmakers are cautious and adopting a wait-and-watch stance.