en.Wedoany.com Reported - Pellet prices in India's Raipur region declined on June 2, with local producers reducing offers by INR 200/tonne, as poor market liquidity and selling pressure were the main factors dragging down prices. BigMint's domestic pellet (Fe 63%) index PELLEX (for Raipur, published bi-weekly) edged down by INR 100/tonne from May 29 to INR 9,400/tonne ($99/tonne) DAP. During this publication window, local pellet producers transacted approximately 15,000 tonnes of pellets at ex-works prices ranging from INR 9,200 to INR 9,400/tonne.
Market participants attributed the price correction to weak downstream steel demand, falling semi-finished steel prices, and cautious procurement strategies adopted by steelmakers. Amid heightened selling pressure and subdued buying interest, Raipur pellet producers lowered offers for Fe 62.5/63% (±0.5%) grade pellets to INR 9,200-9,300/tonne ($97-98/tonne) ex-works. Previously, demand remained sluggish at higher offer levels. Weak sentiment following iron ore auctions by Odisha Mining Corporation (OMC), along with declines in sponge iron and semi-finished product prices, collectively dragged down pellet offers. In May, Raipur sponge PDRI prices fell by INR 1,050/tonne month-on-month to INR 25,350/tonne ($267/tonne) ex-works.
A Raipur-based pellet producer noted that inquiries were limited at previous offer levels, as steelmakers were reluctant to build inventories amid thin margins on finished steel. This price correction was necessary to stimulate buying interest and improve market liquidity. Steelmakers also pointed out that deteriorating margins in the finished steel segment forced them to adopt a conservative procurement approach. One buyer commented that market liquidity remained tight, and current steel demand was insufficient to support aggressive raw material purchases, with most buyers procuring only on a need basis.
Sources said some pellet producers are exploring export opportunities to manage large inventories and diversify sales channels, thereby offsetting weak domestic demand. Market participants also highlighted a significant gap between bids and offers. Although trade negotiations involving Odisha-based suppliers and Raipur buyers took place this week, most transactions remained unconcluded as buyers continued to assess the adjusted price levels. Another steelmaker stated that buyers largely remained on the sidelines, with the market still evaluating the sustainability of the current price correction, and many participants were awaiting further signals.
Currently, market focus is on the upcoming revision of iron ore prices for June delivery by the National Mineral Development Corporation (NMDC), which is expected to provide clearer guidance on raw material cost trends. Market participants believe pellet prices may find clearer direction by mid-week, with some need-based transactions potentially concluded at adjusted offer levels.
In terms of key market drivers, sponge iron prices fell week-on-week: On June 2, sponge PDRI prices declined by INR 550/tonne ($6/tonne) week-on-week to INR 24,450/tonne ($257/tonne) ex-works Raipur, with a day-on-day drop of INR 200/tonne, as market participants remained in a wait-and-see mode anticipating further corrections. Procurement activities were primarily need-based, with no bulk bookings across regions. Billet prices fell week-on-week: On the same day, BigMint's Raipur billet index declined by INR 500/tonne ($5/tonne) week-on-week to INR 38,850/tonne ($408/tonne) ex-works, but the index rose by INR 100/tonne ($1/tonne) day-on-day, supported by improved buying activity and increased inquiries in the semi-finished steel segment. Cautious optimism over finished steel demand also supported spot offers.
According to BigMint's analysis, Raipur pellet prices are expected to remain largely stable, with some transactions likely to be concluded at current offer levels.
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