- NMDC announces iron ore prices for Jan’26 delivery
- Sharp drop seen in PDRI and billet prices w-o-w
Pellet prices in the Raipur market remained largely stable over the last couple of days despite a sharp correction in downstream sponge iron and billet prices, which kept overall market activity tight. The recent decline in steel prices dampened buying sentiment, resulting in cautious procurement from steelmakers. Meanwhile, moderate trading was witnessed in the local market.
Price movements, trades
PELLEX, BigMint’s bi-weekly domestic pellet (Fe63%) index for Raipur, remained stable at INR 9,700/t ($108/t) DAP on Friday compared to the previous assessment on 6 January. Deals for around 25,000 t were concluded by Raipur-based sellers at INR 9,500-9,600/t ($105-106/t) exw. The buyers continued to procure need-based raw material from the local pellet suppliers.
Raipur-based pellet producers have increased offers for Fe 62.5-63% (+/-0.5) pellets by INR 100/t ($1/t) to INR 9,500-9,600/t ($105-106/t) exw.
Meanwhile, some Odisha-based sellers offered material at higher levels of INR 9,800-10,200/t ($110-114/t) DAP in Raipur.
Market scenario
Market participants noted that buyers are currently booking pellets strictly on a need-basis, while aggressive or bulk trades remain absent. A market player informed, “Most buyers are avoiding stock-building at present. Procurement is limited to immediate requirements as price direction remains uncertain.”
Sellers, on the other hand, are maintaining their existing offers, but counter-bids from buyers have been slow amid weakening market sentiments. “There is resistance from buyers at current levels. While sellers are not keen to revise prices downward yet, negotiations are taking longer to conclude,” a market participant said.
Participants further highlighted that the sharp hike witnessed in downstream steel prices last week could not be sustained. Sponge iron and billet prices corrected this week, eroding the optimism that had briefly emerged in the market. A steelmaker noted, ” The steel market moved up too quickly last week and corrected just as fast. This has affected confidence across raw material segments.”
Notably, no trades were reported from Odisha-based pellet sellers in the Raipur market during this period, primarily due to competitive pricing offered by local suppliers. “Local pellet offers are currently more workable, leaving limited room for Odisha-based material in Raipur.”
Meanwhile, major steelmakers are adopting a wait-and-watch approach as NMDC has announced its iron ore prices for January deliveries. Market participants are assessing the impact of these prices on pellet cost structures and future price movements.
NMDC announced its list prices of iron ore CLO (calibrated lump ore) and fines on 9 January, BigMint learnt from sources. The miner has fixed prices of DR CLO (10-40 mm, Fe 67%) at INR 5,150/tonne (t) ($57/t) and of iron ore fines (-10 mm, Fe 64%) at INR 3,900/t ($43/t). Prices are on FOR basis from the miner’s Bacheli complex and exclude royalty, DMF, and NMEDT. However, official confirmation from NMDC is still awaited. NMDC has shifted its pricing structure from a tax-inclusive model to one that excludes royalty, DMF, and NMEDT charges.
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 one (1) was taken for calculation. Thus, the T1 trade category was accorded 50% weightage.
- Seven (7) firm offers, bids, and indicative prices were heard. Five (5) were taken for price calculation and given a balance of 50% weightage.
Key market drivers
- Sponge iron prices fall w-o-w: Sponge iron prices rose by INR 1,250/t ($14/t) w-o-w on 9 January to INR 23,700/t ($263/t) exw-Raipur. However, prices remained unchanged d-o-d. Some trades were recorded in the second half of the trading session, but overall market sentiment was weak.
- Billet prices drop w-o-w: BigMint’s billet index decreased by INR 1,550/t ($17/t) w-o-w to INR 39,700/t ($440/t) exw-Raipur on 9 January. Meanwhile, rose by INR 200/t ($2/t) d-o-d. Market activity remained volatile throughout the day, as mixed but slightly positive signals from neighbouring regions influenced price movements. Improved bookings in the semi-finished steel segment at varied price levels lent support to billet prices. However, participants noted that a sustained recovery will depend on a turnaround in finished steel demand, which remains awaited.
Outlook
Pellet prices are expected to remain volatile in the coming week, while market activity may continue to stay slow until clearer price signals emerge from both iron ore and downstream steel markets.
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