Iron Pellet manufacturers based in the state of Karnataka are looking forward to the decision of Central Empowered Committee (CEC), appointed by the Supreme Court, for allowing them to export Pellets.
In August 2013, Pellet makers in Karnataka in consultation with SteelMint, had written a letter to CEC, requesting them to support the same by stating the points mentioned below:
1. Demand for Indian Direct Reduced grade (DR) Pellets in Chinese market is quite good.
2. Depreciating Rupee against US dollar will benefit Pellet makers and account for higher realization.
3. Export price for Fe 63 DR grade Pellet is above US$155/MT CNF and is better than offers for BF grade Pellet in international market.
In 2011, Supreme Court had suspended exports of Pellet from Karnataka for those companies, who were using e-auction Iron ore to make Pellets.
In a meeting held on May 21, 2013, CEC, in presence geology department, government of Karnataka, officials from the forest state department and more than 40 miners with leases to categoty A and B and other officials, said that it does not support the same as of now.
Sources told SteelMint that the decision is expected to come in the current week itself and Pellet producers are quite hopeful that it would come in their favor.
Looking at the slowdown in economy, trade deficit and Indian currency (Rupee) which has depreciated to 66 levels against US dollar, has pushed to re-think on this subject.
KIOCL, the state owned producer DR grade (Fe 63) Pellet based in Mangalore (Karnataka), is also confident that it would soon start exporting Pellets, which is on hold since September 2011.
Owing to differential freight charges of Rs 1,600/MT by Indian railways, KIOCL has already filed a petition against this policy in high court and is waiting for the same to come down, which would make exports viable.
For more details, contact
Seema Goenka
(seema@steelmint.com)
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