Tata Steel Significantly Raises Pellet Purchases in Sept’15

Iron ore dispatches being stopped by the govt from Noamundi Mines has shifted Tata Steel’s interest towards purchase of pellet from merchant market.

Tata Steel has increased pellet purchases from domestic market. Till yesterday (17 Sept’15) the company procured 107,800 MT pellets from merchant pellet manufacturers. Whereas in Aug’15, the company loaded 61,600 MT pellets. In the coming term, pellet purchases might increase further.

Pellet purchases from Tata Steel rose on account of stoppage of iron ore dispatches from its Noamundi Mines owing to non-conformity in MMDR Act. Stoppage of iron ore dispatches since August ‘15 from Noamundi has largely impacted Jamshedpur Steel plant.

Noamundi mines are crucial to Tata Steel as it supplies raw material to its Jamshedpur steel plant of 9.8 MnT capacity. Noamundi Mines have production capacity of 10 MnT pa and produced 5.5 MnT iron ore in FY15. 

Major pellet suppliers to Tata Steel were JSPL, Odisha Minerals and BRPL. Uptil now, Jindal Steel & Power (JSPL) has supplied total 22 rakes i.e. 84,700 MT pellets. Also, Odisha Minerals supplied 19,250 MT pellets and BRPL supplied 3,850 MT pellets.

*Till 17 Sept’15
Each rake carries approx 3,850 MT pellets
Source: Railways

Tata Steel prefers pellet over lumps

At present, lumps are available at much cheaper prices than pellets, but due to easy availability and handling of pellets, the company is prefering pellet over lumps. Moreover, buying lumps will become comparatively difficult as there is no single indigenous source from where the company could procure lumps.

Pellet manufacturers in Barbil keep prices unchanged

At Barbil, JSPL’s pellet (Fe 63%) prices continue to remain unchanged at INR 4,750/MT, loaded to wagons. It continues to hold prices on account of additional booking of pellets from Tata Steel.

On the other hand, another major pellet supplier, Arya Iron & Steel has kept there sales closed as of now due to maintenance shutdown of its plant.