India: PELLEX rises INR 200/t ($2.5/t) amid sharp hike in sponge iron, semi-finished steel prices

• Buyers remain cautious as sellers lift offers
• Sponge PDRI, billets gain INR 650-750/t d-o-d

Pellet prices in the Raipur region witnessed a marginal increase of INR 100/t this week, following a hike of INR 200/t in offers by local pellet producers earlier in the middle of the week. However, the market was cautious at the revised prices, and moderate trading activity was recorded in the Raipur region.

Price movements, trades

PELLEX, BigMint’s bi-weekly domestic pellet (Fe63%) index for Raipur, increased by INR 200/t to INR 9,900/tonne (t) ($115/t) DAP on 25 July 2025 compared to the previous assessment on 22 July.

Raipur-based pellet producers raised their offers for Fe 63% (+/-0.5%) material by INR 200/t ($2.5/t) to INR 9,700-9,800/t ($112-113/t) exw on 23 July. A few pellet makers kept sales closed and are not active in the market so far.

Deals for around 24,000 t of raw pellets were concluded by Raipur-based suppliers at INR 9,600-9,800/t exw in the last couple of days. Meanwhile, 8,000 t of pellets were booked from Odisha at INR 9,500-9,600/t DAP Raipur. The significant hike in the sponge and billet prices supported pellet tags in today’s trading session.

Pellet (Fe 62.5-63%) offers from Odisha for Raipur were heard at INR 9,500-10,200/t ($110-118/t) DAP.

Market scenario

Market participants indicated that inquiries for pellet purchases slowed down, and some producers even halted their sales, citing sufficient bookings in the previous trading cycle. A pellet producer informed BigMint, “We had already sold enough material last week, so we are in no rush to push more at the current market level.”

The price hike was largely triggered by a surge of INR 650-750/t d-o-d in sponge PDRI and billet tags, following the recent OMC iron ore auction. Despite this, buyers remained cautious about concluding deals at the prevailing prices.

A steelmaker noted, “Pellet demand is there, but at these prices, it is difficult to justify purchases amid the doubt regarding the sustainability of sponge iron and billet prices. We are only booking on need basis and not going for bulk purchases.”

Moreover, trade flow from Odisha remained dry, with limited deals observed with Raipur-based buyers. The lack of consistent supply and demand alignment has further added to market uncertainty.

A sponge iron producer said that the recent hike in sponge prices may support pellet deals and tags. This is likely to be buoyed by raw material shortages in the market, as some pellet sellers have already closed their sales.

Market players noted that pellet prices are unlikely to stabilise if sponge iron and semi-finished steel prices remain firm in the near future. Until then, bulk deals may remain absent.

Rationale

• PELLEX has been derived using data points, i.e., trades, offers, and bids. To download the detailed methodology, click here.
• Four (4) deals were reported in this publishing window, and two (2) were taken for calculation. Thus, the T1 trade category was accorded 50% weightage.
• Eighteen (16) firm offers, bids, and indicative prices were heard. Eleven (11) were taken for price calculation and given a balance of 50% weightage.

Key market drivers

• Sponge iron tags rise w-o-w: P-DRI prices rose by INR 1,750/t ($20/t) w-o-w to INR 25,450/t ($294/t) exw-Raipur on 25 July. Meanwhile, prices shot up by INR 750/t ($9/t) d-o-d today. The increase was fuelled by positive market sentiment, firm demand across semis and finished steel, and price support from neighbouring regions.
• Billet prices climb up w-o-w: Billet prices in Raipur sharply increased by INR 1,450/t ($16-17/t) w-o-w to INR 38,150/t ($440-441/t) exw today while rising INR 650/t ($7-8/t) d-o-d. The market saw a widespread uptick in buying interest, especially in Raipur, driven by tight raw material supply and controlled billet availability in the spot market. This encouraged producers to hold or raise offers further.

Outlook

Pellet prices are expected to remain firm if sponge iron and other semi-finished tags hold firm at the current levels. Raipur-based buyers may conclude some bulk deals in the near term.