India: PELLEX remains stable in recent deals, local offers unchanged

• Trade activity in Raipur improves slightly
• Bulk deals yet to be concluded by buyers

The Raipur pellet market remained stable despite local steelmakers increasing their procurement. However, most deals were on need basis and concluded with local pellet producers, though some transactions also took place from neighbouring regions. A recent uptick in sponge iron and semi-finished steel prices strengthened buyers’ confidence, leading to a slight increase in trade momentum over the last couple of days.

BigMint’s bi-weekly domestic pellet (Fe63%) index remained stable at INR 9,800/t ($113/t) DAP Raipur on 11 February 2025 compared to the previous assessment on 7 February. Deals for around 23,000 t of pellets (Fe62.5/63%) were concluded at INR 9,700-9,950/t ($112-115/t) DAP Raipur by local pellet manufacturers over the assessment window. Additionally, local steelmakers made some pocket deals for around 5,000 t of pellets (Fe62.5/63%) from Odisha region at INR 9,500-9,600/t ($110-111/t) DAP Raipur a few days back.

Local pellet offers remained stable over the past few days, with plants receiving consistent inquiries. Pellet offers in Raipur for Fe63% (+/- 0.5%) remained stable at INR 9,700-9,900/t ($112-114/t) exw.

A pellet producer informed BigMint, “We are seeing good buying interest at current prices, which is keeping the market stable. The demand outlook may remain positive if sponge PDRI and billet prices continue to support sentiment.”

Odisha-based plants offered pellets (Fe62.5-63%) to Raipur at INR 9,400-9,800/t ($108-113/t) DAP, and a few deals were concluded by them.

A buyer commented, “The recent rise in steel tags has encouraged buyers to procure material. However, most purchases have been on need basis, and bulk deals are yet to take place in the region.”

Meanwhile, market participants noted that if sponge PDRI and billet prices sustain their uptrend, the pellet market will likely remain firm, encouraging further trading activity 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.
• Five (5) deals have been reported so far in this publishing window, and four (4) were taken for calculations. The T1 trade category was accorded 50% weightage.
• Seventeen (17) firm offers, bids, and indicative prices were heard. Fifteen (15) were taken for price calculation and given the balance 50% weightage.

Factors impacting pellet prices

• Sponge iron tags up w-o-w: P-DRI prices rose by INR 250/t ($3/t) w-o-w to INR 25,000/t ($288/t) exw-Raipur on 11 February. However, prices decreased by INR 100/t ($1/t) d-o-d today. Sponge iron prices fell amid a lack of buying interest today. Deals remained absent in Raipur today amid weak market sentiments.
• Billet prices rise w-o-w: Billet prices in Raipur increased by INR 650/t ($7/t) w-o-w to INR 39,500/t ($455/t) exw today. Furthermore, d-o-d, prices moved down by INR 100/t ($1/t). The index witnessed a decline today, amid a poor finished steel market and lack of buying interest from end-users. However, prices were trending northward till yesterday.

Outlook

According to BigMint’s analysis, pellet offers are expected to remain firm this week, given need-based trades. Notably, bulk deals may remain absent in the region amid cautious buying interest from local steel producers.