Essar Steel, having India’s largest Pellet capacity of 14 MnT pa (6 MnT at Paradip and 8 MnT at Vizag), shipped 50,000 MT Pellets to Iran.
Essar Steel concluded an export deal with Iran based DRI plants at USD 138-139/MT FoB Vizag port (inclusive of 5% export duty). Freight rate is assumed at USD 10-12/MT.
The vessel named ‘MV Parisan’, carrying 50,000 MT DR grade pellets (Fe 66%) left Vizag port on 18 Mar’15 and is expected to reach Bandar Abbas port (one of the biggest sea port in Iran) on 25 Mar’15.
The deal comes as a surprise because global Iron ore prices are at a five year low. In contrast to low margins from export to China, which operates Blast furnaces and imports BF grade pellets, export to Iran has fetched better prices.
DR grade and superior quality i.e. Fe 66% pellets are required by Iranian DRI plants. In our previous reports, we have already justified that there is scarcity of high grade DR pellets in the global market. Since Nov’14, India has exported 0.37 MnT Pellets to Iran, out of this, Essar exported 0.26 MnT.
Essar Steel procures Fe 64% Iron ore fines from NMDC’s Chhattisgarh mines. The company has a 8 MnT pa beneficiation plant at Kirandul. The material is pumped to Vizag as slurry through a 267 km pipeline.
Iran uses 100% DR grade Iron pellets as basic raw material for steel making. Iran is in want of more Pellets at this stage since its existing DRI plants are running short of Pellets and many new DRI plants are under construction. According to our research, Iran’s current DRI capacity at 17.6 MnT is facing a shortfall of 5.1 MnT Pellets.
Leave a Reply