Standalone Pellet Plants Iron Ore Sourcing Increased Sharply in FY17

Standalone pellet plants’ iron ore sourcing have seen an increase of 116% in FY17 with 7.08 MnT purchased by various pellets manufactures. The total quantity sourced in FY17 was 2.16 times the quantity sourced in last FY at 3.27 MnT.  The sourcing was increased mainly due an increase of 893% in pellets exports over improved realization  with the quantity of 8.26 MnT from India in FY17 compare with a meager quantity of 0.83 MnT in FY16.

BRPL’s iron ore sourcing up by 121% in FY17 with highest quantity at 2.89 MnT – BRPL retained its top sourcing position with 2.21 times more quantity sourced this FY17 compared with 1.31 MnT last fiscal. Manufacturer’s sourcing increased from KJS Ahluwalia 217 times with the quantity of 1.06 MnT this fiscal, from MESCO the purchases were increased this FY by 204% with 3.04 MnT of iron ore. The sourcing was down by 2% from KN Ram. BRPL’s pellet exports grew from 0.05 MnT in FY16 to 1.8 MnT in FY17.

KIOCL’s iron ore sourcing up 21 times in FY17 – KIOCL sourced 1.56 MnT iron ore in FY17 against 0.07 MnT in FY16 which was 21.47 times higher this FY17.  Out of total quantity sourced in FY17 79% was from NMDC Chhattisgarh and rest through imports and Odisha based KayPee Enterprises.  KIOCL’s pellet exports grew from 0.17 MnT in FY16 to 0.92 MnT in FY17.

Arya Iron & Steel iron ore sourced 63% more quantity in FY17- Barbil based pellet maker – Arya iron & steel sourced 0.86 MnT iron ore in FY17. The pellet manufacturer majorly procured iron ore from KN Ram, MESCO, Rungta Mines and A.M.T.C.

MSPL increased its iron ore sourcing by 54% in FY17 – MSPL’s iron ore sourcing moved up to the tune of 0.73 MnT in FY17 from 0.47 MnT in FY16. Much of the iron ore sourced was from Vyasankere Iron Ore Mines, Veerabhadrappa Sangappa, Iyli Gurunatha Iron Ore Mine followed by P Balasubba Setty & Son, SMIORE and B Rudra Gouda.

Other Companies that Sourced the material in FY17 – Ardent Steel-0.32 MnT, NMDC Pellet Karnataka-0.04, Xindia Steels-0.01 MnT and Rashi Steel & Power with 0.01

Standalone pellet plants iron ore sourcing: FY17 Vs FY16

Qty in MnT
Provisional data
Source: Odisha govt., Railways, Karnataka DMG

Standalone pellet plants may reduce iron ore sourcing amid falling global prices-Looking at the current continuous decline in global iron ore prices, Indian pellet exports have turned less viable, if the scenario doesn’t change anytime soon stand alone pellet plants may cut down on production and iron ore souring in FY18 and may focus only on domestic sales.