Indian Iron ore Pellet prices have been stable and unexpectedly high despite cheap availability of iron ore fines in Indian domestic market.
Industry experts feel that Pellet prices which are abnormally high as compared to prices in international market, should come down in FY 2013-14 due to rising capacities in India.
Mr B. L. Agrawal, CMD of Godawari Power and Ispat Ltd – one of the largest Pellet manufacturer based in the Central part of India shared his outlook on Pellet market with SteelMint and said that “Pellet as well as lumps prices would start witnessing a downward trend in Indian domestic market by the end of FY 2014 as a result of increasing capacities of Pellet, which is likely to double.
Few of the commercial Pellet plants might also close down with Pellet maker’s margins being reduced and exports would become a necessity.
Export duty on Iron ore has not been lowered so as to encourage its supply to domestic steel units.
But, for exports of Pellet, railway freight charges imposed is more than double of what it should have been and must come down,”.
Current prices in Indian domestic market are around Rs 7,400-7,500/MT for Pellet with Fe% 63.
Whereas, global prices are standing in the range of $170-175/MT CFR Asia for Pellet with Fe% 65.
He also mentioned, “Though, India has huge reserves of Iron ore and coal, 15-20 million
tons of Iron ore is being imported and imports of coal are also rising. India,
at one a point in time, was the largest exporter of about 1.5 million tons.
Until and unless, there is some transparent policy put up by the government,
things don’t look to resolve.
The number of direct and indirect taxes being imposed on the
steel industry, which is a way by which government is maximizing its revenues, is causing a negative effect and
plants are forced to opt for a close down”.
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