Iron pellet industry in Odisha is facing tough time as prices & demand have not picked up, resulting in stockpile. Indian Sponge iron prices came down by INR 200/MT in a week.
Indian Pellet exports are not viable owing to duty imposition and fall in Chinese Iron ore prices which are at 8 month low. Also, Sponge iron units are willing to accept cheaper Pellets. A couple of Pellet plants in eastern sector are non-operational till the market revives. Operating capacity has touched 30-35% to avoid any built up in inventory levels at one of the Pellet plant.
A senior official of a Pellet producing company in Odisha remarked, “Demand hasn’t weakened but buying sentiment of Sponge iron plants has been fluctuating, looking at lower price levels. I think that Sponge iron plants will ultimately come under pressure to offer their material at lower prices, when procuring cheaper Pellets.”
Arya Iron & Steel based in Barbil is selling Pellets at INR 6,500/MT (basic). Bhushan Power & Steel in Jharsuguda is offering at INR 7,000/MT and another manufacturer at INR 6,800-6,900/MT.
JSPL using Pellets for Self Consumption
Jindal Steel & Power having a 4.5 MnT pa Iron Pellet plant in Barbil (Odisha) and one of the largest exporters has closed 150,000 MT Pellet export deal with Jindal Shaheed in Oman (Middle East).
The deal has been finalized at USD 150-155/MT FoB including 5% export duty. 50,000 MT of the material has been shipped from Paradip Port. The rest 100,000 MT will reach Oman in April, 2014 to be utilized in 2 MnT pa gas based DRI plant.
The company is offering Pellets at INR 6,750/MT (basic) to domestic buyers; however they are not placing any booking orders.
Chhattisgarh
Godavari Power & Ispat resumes domestic Pellet sales at INR 8,100/MT (basic). One of the Raipur based Pellet maker is selling at INR 8,000/MT. Market is not encouraging at the back of poor offtake in Odisha market.
Karnataka
KIOCL‘s Pellet prices for March are standing at INR 8,000/MT because of factors such as exports are non-viable after government imposed a 5% export duty on Pellet and distance based charge by railways still exists.
Other manufacturers such as MSPL and Xindia Steels are offering Pellets (Fe 62 & 62.5) at INR 7,800-8,000/MT (basic) owing to decent demand. Prices for Fe 60 material is at INR 7,100/MT (basic).
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