With the aim of ensuring better quality steel production within the country, fetching more forex through exports and better utilization of iron ore fines, the steel ministry will be pushing for more production of pellets domestically in the coming days.
The production of pellets, according to Pellet Manufacturers’ Association of India (PMAI), which stood at 48.5 MnT in 2016-17 compared to 47 MnT in the previous fiscal, amounts to only 35% of the installed capacity. The steel ministry targets to take it to at least 80% as soon as possible.
The production of pellet got a fillip in the country following the government reduced basic customs duty to 2.5% from 7.5% earlier on plant and machinery imports meant for setting up pellet units. It also exempted export duty on pellets during the same year.
However, in 2014, it again imposed 5% export duty on pellets, but the same has been scrapped in 2016. The production of pellets is less in the country mainly because of the paucity of gas supply and subdued demand for the value-added product of iron ore.
To facilitate more production, the steel ministry is trying to ensure adequate supply of gas to meet the need for the fuel of the pellet plants which will also make their production process more eco-friendly as there will be less carbon emission. It will also lay emphasis on setting up slurry pipelines for taking pellets to the doorstep of the steel units at a cheaper cost.
“We have asked MECON to give a detailed report regarding utilisation of pellets for steel production and pelletisation plants within one month’s time,” a steel ministry source said.
The steel ministry believes that higher production of pellet would not only help in higher forex earnings through exports, it will also ensure better quality of steel production by the domestic industry. India exported 6.9 lakh tonnes and imported 2.7 lakh tonnes pellets in 2015-16.
Besides, it feel that more use of pellets will mean better utilization of the fines and less reliance on coking coal imports for manufacturing of steel. More usage of pellets of uniform size will also mean better efficiency in the steel making process.
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