Devaluated INR resulted in feasible pellet exports for Essar Steel
Essar Steel, India’s largest pellet exporter has concluded a second pellet deal in-line with the previous one within this month. The deal has been concluded from its Paradip (Odisha) plant.
A vessel named “Padhoulas” carrying 75,000 MT pellets is on berth since 26 Aug’15. According to customs data, the deal had been tentatively concluded at around USD 60-62/MT FoB, India and around USD 70-72/MT CFR China. Pellet exports from India attracts an export duty of 5%.
Earlier, on 16 Aug’15 the company had concluded its first deal of the month with China. A vessel named “MV Vishva Anand” carrying 78,100 MT pellets left Paradip Port and is expected to reach China by the end of this month. The deal had been concluded at USD 60-62/MT FoB India, similar to the second one.
This month, the company concluded two export deals at a price of around USD 60/MT, ex-plant realization would be around INR 3,700-3,800/MT. Devaluated INR is making realizations better and pellet exports more viable.
Pellet Exports Shipment Details
| Shipment Date | Quantity (MT) | Price in USD/MT | Loading Port | Unloading Port at China |
| 16-Aug’15 | 78,100 | 60/MT FoB,Paradip | Paradip | Tianjin |
| 26-Aug’15 | 75,000 | 60/MT FoB,Paradip | Qingdau |
Source: SteelMint Research
Can China also be a potential market for pellet export?
After Iran, China can also be considered as potential market for Indian pellet export. Major reasons can be INR devaluation, which is supporting pellet exports to some extent. Also, pellet demand in India is low since the starting of this month owing to dull market sentiments.
With current dull market sentiments, pellet export is only viable for Essar Steel. Since, Essar exports all of its material from its plants located near major ports, namely Paradip and Vizag. The transportation cost from these plants to ports remains less as it is mainly done via conveyor belts.
Leave a Reply