KIOCL, a Ministry of Steel owned Iron Pellet producer (3.5 MnT pa installed capacity) based in Mangalore, has concluded an export deal after 15 month’s time.
The deal has been finalized with a Singapore based trader at USD 162/MT FoB Mangalore Port, for 50,000 MT of BF grade (Fe 63) Pellets.
On 18 Dec, KIOCL had floated a Pellet export tender for Dec shipment, which has held between 1400 hrs IST on the 12th & 1400 hrs IST on the 13th, among empanelled customers.
On what grounds has KIOCL received high bids?
Market sources said that current export prices are hovering in the range of USD 153-155/DMT FoB Indian east coast, for January shipment. KIOCL has received higher bids in compared to other Indian exporters, as
- it offered Pellets for immediate shipment, in the current month and
- total quantity (50,000 MT) offered for exports is in bulk
|
KIOCL’s Total Cost of Exporting 1 MT of Fe 63 Iron Pellet
|
Export
|
Domestic
|
| Cost of 1 tonne of Fe 63 Iron ore fines from NMDC’s Chhattisgarh mines | 2,810 | 2,810 |
| Royalty | 280 | 280 |
| From Baiadila mines to Vizag Port (552 kms) | 3,050 | 1,150 |
| From Vizag Port to Mangalore port | 400 | 400 |
| From Mangalore port to KIOCL | 50 | 50 |
| Landed cost | 6,590 | 4,690 |
Cost of Making Pellets |
||
| Iron ore fines (Requires 1.2 MT fines to make 1 MT of Pellet) | 7,908 | 5,628 |
| Other costs | 1,500 | 1,500 |
| Port Charges | 50 | 50 |
| Total Cost | 9,450 | 7,178 |
| Realization* | 9,963 | 8,200 |
| Operational margins (in INR/MT)# | 513 | 608 |
* Current Export price of 1 tonne of Pellet = USD 162 FoB*61.5 (INR)
* KIOCL’s Domestic offers at Rs 8,200/MT for December 2013
# Depreciation and other admin costs are not included
Bailadila mines to Vizag Port includes Busy route surcharge
Source: SteelMint
KIOCL might raise domestic Pellet prices for Jan 2014
Market participants expect KIOCL to raise domestic Pellet prices in the month of January, owing to a higher realization from global market.
The company’s export realization is around INR 9,963/MT. Whereas, for the similar grade, its domestic offers are quoted at INR 8,200/MT (ex-plant basis).
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