India: PELLEX rises by INR 150/t as producers lift offers; market seeks price clarity from OMC auction

• Sharp hike in sponge iron, billet prices lends upward momentum
• Trade slows, buyers uncertain if higher steel prices will sustain

Pellet prices in the Raipur region increased by INR 100-200/t over the past two to three days, as recorded on 16 January 2026, supported by higher offers from local producers. An improvement in the downstream product prices led to sellers revising their offers upward.

Price movements, trades

PELLEX, BigMint’s bi-weekly domestic pellet (Fe63%) index for Raipur, rose by INR 150/t to INR 9,800/t ($108/t) DAP on Friday compared to the previous assessment on 13 January. Deals for around 15,000 t of pellets were concluded by local producers at INR 9,600-9,700/t exw-Raipur, following the latest round of price revisions.

Raipur-based pellet producers raised offers for Fe 62.5-63% (+/-0.5) grade pellets by INR 100-200/t ($1-2/t) to INR 9,600-9,700/t ($106-107/t) exw. The upward revision follows NMDC’s price increase for January 2026 iron ore sales. A sharp uptick in sponge iron offers in Raipur also contributed to the higher pellet offers.

Meanwhile, some Odisha-based sellers offered material at higher levels of INR 9,800-10,200/t ($108-112/t) DAP in Raipur.

Market scenario

Sources said that the increase in sponge iron and billet prices from the middle of the week supported higher pellet offers. A market participant noted, “The uptick in sponge iron and billet prices helped pellet producers regain some confidence, prompting them to revise offers upward.”

Trade activity during the period remained moderate, with a few sellers concluding small-volume deals at the revised levels. Sellers are currently maintaining the higher offers, citing improved realisations in the semi-finished steel segment. A pellet producer said, “Deals are limited, but whatever material is moving is getting absorbed at the revised prices.”

However, buying interest remained selective as major steelmakers refrained from aggressive procurement ahead of the upcoming Odisha Mining Corporation (OMC) auction scheduled next week.

A buyer informed BigMint, “Most large steelmakers are putting purchases on hold, expecting the OMC auction to set the near-term price direction. Additionally, some buyers had already secured material last week.”

Another buyer added that market participants are waiting for stability in downstream steel prices before committing to fresh raw material purchases. He observed, “There is uncertainty in billet and finished steel prices, so buyers are cautious with pellet procurement.”

Sellers highlighted that inquiries in the market are moderate, with purchases largely restricted to need-based requirements. “Buyers are not stocking aggressively; inquiries are coming only for immediate consumption,” a seller stated.

Rationale

• PELLEX has been derived using data points, i.e., trades, offers, and bids. To download the detailed methodology, click here.
• Two (2) deals were recorded in this publishing window, so this category was taken for calculation. Thus, the T1 trade category was accorded 50% weightage.
• Eleven (11) firm offers, bids, and indicative prices were heard. Eight (8) were taken for price calculation and given 50% weightage.

Key market drivers

• Sponge iron prices rise w-o-w: Sponge iron prices declined by INR 850/t ($9/t) w-o-w on 16 January to INR 24,550/t ($271/t) exw-Raipur. Furthermore, prices dropped by INR 50/t ($0.5/t) d-o-d. Due to the price increase, overall demand remained steady to muted, as elevated prices prompted buyers to adopt a cautious approach. Enquiries were limited, with most participants restricting purchases to immediate or urgent requirements, due to uncertainty surrounding finished steel price movements. Market sentiment, therefore, remained guarded despite the upward price momentum.
• Billet prices surge w-o-w: BigMint’s billet index increased by INR 1,050/t ($12/t) w-o-w to INR 40,750/t ($449/t) exw-Raipur on 16 January. Meanwhile, prices rose by INR 100/t ($1/t) d-o-d. Manufacturers quoted higher prices, supported by decent buying activity in the previous session. Buyers adopted a cautious stance, having already procured sufficient material, and waited for further clarity on market direction. Fresh bookings were largely deferred, particularly as offtake in the finished steel segment remained weak.

Outlook

For now, pellet prices are likely to remain stable. Market participants expect further clarity on price trends to emerge following the OMC auction. Odisha-based sellers are expected to adjust their offers post-auction, potentially impacting pellet pricing trends across the Raipur region in the short term.