Essar Steel, having India’s largest Iron Pellet capacity of 14 MnT pa (6 MnT at Paradip and 8 MnT at Vizag), has contributed 81% of India’s total Pellet export to Iran in FY15.
India’s Pellets export share to Iran was 69% (0.57 MnT via 11 shipments) out of its total export in FY15. Essar Steel’s Pellet export to Iran alone was 0.46 MnT via 9 shipments.
Essar has played a major role in India’s total Pellet export, as its share was 61%; the balance was exported by KIOCL, Kredence Multi Trading and Tuf Metallurgical.
Iran uses 100% DR grade Pellets (Fe 66%) as basic raw material for steel making. Essar Steel procures Fe 64% Iron ore fines from NMDC’s Chhattisgarh mines and produces superior quality Pellets. The company has a 8 MnT pa beneficiation plant at Kirandul and fines is pumped to Vizag as slurry, through a 267 km pipeline.
Pellet Exports from India in FY15
|
Shipment |
Month | Qty | Price | Shipper | Loading Port |
Vessel Name |
Destination |
| 22 Mar’15 | Mar’15 | 50,000 | 138.5 | Essar | Vizag | Arsham | Iran |
| 15 Mar’15 | Mar’15 | 50,000 | N/A | Essar | Vizag | Parisan | Iran |
| 02 Mar’15 | Mar’15 | 50,000 | 139 | Essar | Vizag | Miami Pride |
Iran |
| 28 Feb’15 | Feb’15 | 50,000 | 138.8 | Essar | Vizag | Kiazand | Iran |
| 16 Dec’14 | Dec’14 | 52,000 | 145 | Essar | Vizag | Bavand | Iran |
| 07 Dec’14 | Dec’14 | 52,000 | 144 | Essar | Vizag | Baskar | Iran |
| 03 Dec’14 | Dec’14 | 52,000 | 142 | Essar | Vizag | Artman | Iran |
| 26 Nov’14 | Nov’14 | 50,000 | 142 | Essar | Vizag | Avang | Iran |
| 17 Nov’14 | Nov’14 | 54,000 | N/A | Essar | Vizag | Theometor | Iran |
| 16 Nov’14 | Nov’14 | 55,000 | N/A | Kredence Multi Trading |
Vizag | Almeria | Iran |
| 08 Oct’14 | Oct’14 | 55,000 | N/A | KIOCL | Mangalore | Hamgam | Iran |
| 31 Oct’14 | Oct’14 | 50,000 | N/A | Essar | Paradip | V Avocet | China |
| 23 Aug’15 | Sep’14 | 55,000 | 115 | KIOCL | Mangalore | Port Nelson | N/A |
| 03 May’14 | May’14 | 52,000 | 122 | BRPL | Paradip | Genco Bourgogne |
China |
| 25 Apr’14 | Apr’14 | 21,000 | 141 | Netincon Marketing |
Haldia | Navios Oriana |
China |
| 20 Apr’14 | Apr’14 | 50,000 | 135 | BRPL | Paradip | Virginia | China |
| 07 Apr’14 | Apr’14 | 35,000 | 166 | TuF Metallurgical |
Paradip | Kai He | Iran |
| Total | 833,000 |
NA: Not Available
Qty in MT
FoB Prices in USD/MT
Provisional data
Source: SteelMint Stats, Customs
Essar’s Recent Shipment
On 22 Mar’15, Essar Steel shipped 50,000 MT Pellets from Vizag port (vessel name Arsham), which is expected to reach Bandar Abbas (one of the biggest sea port in Iran) on 04 Apr’15.
The deal was concluded at USD 138.5/MT FOB Vizag port (inclusive of 5% export duty). Freight rate is assumed at USD 13-15/MT.
Iran has emerged as an export market for Essar Steel, on the following grounds
1. Iran, the largest crude steel producer in the Middle East and world’s 2nd largest DRI producer, has large scale Pellets & DRI plants capacity expansion plans owing to ample availability of Magnetite Iron ore.
2. The gas based DRI plants use 100% DR grade Pellets, which is their basic raw material for steel-making. Abundant supply of natural gas and electricity at cheaper prices, results in low conversion cost of Pellets to DRI.
3. High quality lump ore aren’t available in Iran and contain high P & S and 54-58% total Fe. To add, there is scarcity of high grade DR pellets globally.
4. The country aims to raise steel output rapidly, 80% of it comes from EAF route using 75-80% DRI. Current DRI capacity at 17.6 MnT is facing a shortfall of 5.1 MnT Pellets.
5. By 2015-16, with addition of 13 MnT DRI capacity, Iran’s Pellet requirement is expected touch 18.9 MnT. Thus, the DRI plants shall face scarcity of 8.8 MnT Pellets this fiscal year.
6. Taking into consideration the total DRI and Pellet capacity (current & expected) of 30.6 MnT and 30.5 MnT respectively by 2016 end, Iran may have to import 13.9 MnT Pellets to match the total requirement.
7. About 90% of Pellets produced in Iran is used for in house consumption; the rest is for domestic sale.
8. Import conditions from other countries are unfavorable due to various political interruptions. Supply from exporters is low as they are occupied with long term contract sales to Japan, South Korea, China, Far East, UAE, Saudi Arabia & Oman.
9. Pellets imports are quite costlier from countries other than India, with longer delivery time. Voyage time from India to Middle east countries is 15 days to a month, depending upon the movement of material from plant to port.
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