Eastern India based pellet plants have reduced merchant sales owing to falling margins and limited buying in merchant market.
Market participants shared that limited buying and losses incurred have compelled many merchant pellet makers to think to continue their sales. Some major pellet makers namely Adhunik Metalliks, Bhushan Power & Steel and MSP Steel have turned off from merchant pellet supplies and are using their plants only for captive usage.
As per analysis of SteelMint, there are only handful number of pellet makers who are selling pellets in merchant market. But it was heard through sources that looking at the depressed sentiments many of them have stopped procuring fines for further pellet making.
Overview of eastern India pellet market
| State | Name of Pellet plant | Capacity (MTPA) | Remarks |
| Odisha | Jindal Steel & Power | 9 | Operating at 50% capacity |
| Arya Iron & Steel | 1.2 | Has recently resumed operations after maintenance shutdown but buying remains limited | |
| Ardent Steel | 0.6 | Currently running at 50% capacity and supplying in merchant market, might shutdown if subdued demand persists |
|
| Brahmani River Pellets | 4 | Production on hold from 2nd Nov’15 only meeting booked orders | |
| Bhushan Power & Steel | 3.5 | Stopped merchant sales, only for captive usage | |
| Shyam Metaliks & Energy | 0.6 | Currently supplying in merchant market but with limited capacity | |
| MSP Steel | 0.6 | Stopped merchant sales, only for captive usage |
|
| Jharkhand | Adhunik Metaliks | 1.2 | Stopped merchant sales, only for captive usage |
| Usha Martin | 1.2 | Stopped merchant sales, only for captive usage |
|
| West Bengal | Rashmi Metaliks | 1.2 | Operational but with limited capacity utilization |
| Shyam Sel | 0.6 | Currently supplying in merchant market but with limited capacity, might close if demand weakens | |
| Ankit Metal & Power | 0.6 | Operational but with limited capacity utilization | |
| Total capacity | 24.3 | 30-40% capacity is only utilized for merchant sales |
Pellet prices continue to remain at similar levels as they were seen last week. However, buying continues to remain limited. Prices are likely to remain stable this week amid festive holidays.
Trade-wise:
- Barbil based pellet maker sold some quantity of pellets at INR 3,400/MT (loaded to wagons)
- Keonjhar pellet prices are at INR 3,200-3,300/MT
- Pellet prices in Durgapur are in the range of INR 4,300-4,500/MT. Pellet makers are seen giving discounts on bulk purchases to boost sales
- Jharsuguda pellet prices are at INR 3,800/MT (basic)
- Pellet prices in Raipur continue to remain stable at INR 4,500/MT (basic). It was heard that a pellet deal was concluded by Raipur based plants at INR 4,200/MT (FoR Raipur)
- Jindal SAW pellet offers remain unchanged at INR 4,800/MT (delivered to Kandla). However, Gujarat based steel mills prefer imported South African lump which have fallen to USD 55/MT, CFR west coast of India for ready stock
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