India: PELLEX rises as steel prices strengthen

• Offers rise amid higher raw material costs, downstream prices
• Enquiries remain subdued amid market uncertainty

Pellet prices in the Raipur region strengthened at the start of the week, supported by higher sponge iron and semi-finished steel prices. However, overall trading activity remained slow, with need-based procurement, while buyers monitored price direction.

Trades and price movements

PELLEX, BigMint’s bi-weekly domestic pellet (Fe 63%) index for Raipur, increased by INR 350/t to INR 11,150/t ($121/t) DAP on 10 March, compared with INR 10,800/t on 6 March.

Producers raised offers for Fe 62-63% (+/-0.5%) grade pellets by around INR 300/t to INR 11,000/t ($119-120/t) exw. The increase was mainly supported by a INR 400/t w-o-w rise in sponge iron prices, and firmer downstream steel prices.

Addition to that NMDC’s March price revision, increased base prices of iron ore lumps and fines by INR 50-100/t. The price revision has strengthened input cost expectations for pellet producers, encouraging them to maintain firmer offers.

Market dynamics

Market participants said the recent rally in sponge iron and billet prices has strengthened sentiment across the Raipur steel value chain, encouraging pellet sellers to revise their offers upward.

A Raipur-based pellet seller said, “We have increased our pellet offers this week in line with the sharp rise in downstream steel prices. However, enquiry levels are still relatively low compared with our expectations.”

Buyers, meanwhile, said uncertainty around near-term price trends is keeping procurement largely requirement-driven.

A Raipur-based steelmaker said, “At the moment the market direction is still unclear, so it is difficult to take a strong call on prices. We already have sufficient inventories and are mostly running on those stocks. For now, we are also preferring DR CLO as feed material.”

Sources added that while a few mills remain active, most buying is occurring only in small pockets, with purchases largely restricted to immediate operational requirements rather than bulk bookings.

Market participants also pointed to rumours of a potential gas supply constraint in the region, which has added a layer of caution among buyers. Although the issue has not yet affected operations, the uncertainty has slightly dampened demand.

Overall, pellet sellers noted that deal closures have been limited so far, as many buyers prefer to wait for clearer signals from the downstream steel market before committing to larger volumes.

Rationale

• PELLEX has been derived using data points, i.e., trades, offers, and bids. To download the detailed methodology, click here.
• One (1) deal was recorded in this publishing window, but was not taken for calculation. Thus, the T1 trade category was accorded 0% weightage.
• Fifteen (15) firm offers, bids, and indicative prices were heard and were taken for price calculation and given balance 100% weightage.

Key market drivers

• Sponge iron prices rise w-o-w: Sponge PDRI prices rose by INR 400/t ($4/t) w-o-w on 10 March to INR 27,800/t ($302-303/t) exw-Raipur. Sponge iron prices in Raipur fell by INR 300/t d-o-d. Procurement activity remained moderate to good, with enquiry levels picking up notably, which helped improve overall market participation and trading momentum. Mills largely maintained higher offers, while buyers actively made fresh bookings to secure material.
• Billet prices jump w-o-w: BigMint’s billet index increased by INR 950/t ($10-11/t) w-o-w to INR 42,250/t ($459-460/t) exw-Raipur. Market sentiment remained volatile but broadly positive during the session, supported by rising finished steel prices and improved offtake in key consuming regions, which encouraged selective bookings in the semi-finished segment. Firmer finished steel prices boosted buyer confidence, prompting selective forward bookings at varied offers. However, overall trading remained limited as buyers stayed cautious amid weak finished steel offtake and awaited clearer demand signals despite reduced seller offers.

Outlook

Pellet prices in Raipur are expected to remain firm in the near term, supported by higher sponge iron and billet prices along with rising iron ore input costs. Ongoing geopolitical uncertainties are also likely to keep the market cautious, with most buyers continuing need-based procurement.