India: PELLEX remains stable in mixed market amid safeguard duty imposition

• Few Raipur plants cut pellet offers yesterday
  
  
• Sponge iron, billet tags rise by INR 550/t d-o-d
  
  

Pellet prices in the Raipur region remained largely range-bound despite a sharp INR 500-600/tonne (t) ($6-7/t) d-o-d hike in sponge iron and semi-finished steel prices today, following the government's announcement of a 12% safeguard duty on flat steel imports. This sudden price surge created uncertainty among market participants, particularly in the pellet segment, where trading sentiment remained cautious.

PELLEX, BigMint's bi-weekly domestic pellet (Fe63%) index, remained stable at INR 10,150/t ($119/t) DAP Raipur on 22 April 2025 compared to the previous assessment on 18 April. In this publishing window, deals for around 15,000 t of pellets (Fe63%) were concluded by Raipur-based sellers at INR 10,150/t ($119/t) DAP. A few small deals were also concluded for material from Odisha.

Local pellet sellers, some of whom had reduced offers a day before, are now holding back sales and closely monitoring market dynamics. A supplier said, "We saw a big jump in sponge iron prices, but pellet trades have not picked up pace yet. Everyone is waiting for more clarity."

Notably, some Raipur-based pellet producers reduced their offers for Fe63% (+/- 0.5%) by INR 200/t to INR 9,900-10,100/t ($116-118/t) exw yesterday, with some deals closed at the revised offers. Weak market sentiments following the Odisha Mining Corporation (OMC) iron ore auction and a steady decline in sponge and semi-finished prices led to a drop in pellet offers yesterday. However, today, there was a sharp recovery in sponge iron and billet prices.

A Raipur-based producer stated, "We are keeping similar offers as last week amid the recent OMC bids and a sharp hike in the downstream steel prices today after yesterday's safeguard duty announcement."

The recent OMC auction also saw stable prices compared to the previous month, adding to the cautious sentiment in the pellet market. A buyer noted, "OMC's steady pricing did not give any strong signals to the market. With this new duty move, it is best to wait and watch."

Trading activity in Raipur was moderate, with a few spot deals reported by local steelmakers. Market participants believe that a clearer trend in pellet pricing will emerge in the coming days as steelmakers assess the full impact of the safeguard duty on overall demand.

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 reported so far in this publishing window and two (2) were taken for calculations. The T1 trade category was accorded 50% weightage.
  
  
• Sixteen (16) 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 rise d-o-d: P-DRI prices rose sharply by INR 550/t ($6/t) d-o-d to INR 25,800/t ($303/t) exw-Raipur on 22 April. Meanwhile, prices remained largely stable w-o-w. Today, buyers adopted a wait-and-watch approach due to an unstable market, which led to muted trades amid rising prices.
  
  
• Billet prices shoot up d-o-d: Billet prices in Raipur increased significantly by INR 550/t ($6/t) d-o-d to INR 41,250/t ($484/t) exw today. Furthermore, w-o-w, prices edged down by INR 100/t ($1/t). Trades were sluggish due to the fluctuation in prices.
  
  

Outlook

According to BigMint's analysis, pellet prices in central India are expected to remain uncertain this week due to volatile market sentiments. However, tags are likely to rise if prices of sponge iron and semi-finished products remain at the current levels.