Essar Steel Resumes Pellets Export to China

After a long gap of 8 months, Essar Steel resumes pellets exports from the month of June’16. In FY16, the company turned out to be the largest pellet exporter followed by KIOCL.

By the end of last month, the company had concluded a deal of around 50,000 MT high-grade pellet to China. The deal has been concluded from its Paradip (Odisha) plant.

A vessel named “ Lara” carrying 50,000 MT high-grade pellet is exported to China on 03 June’16. According to customs data maintained by SteelMint, the deal had been concluded at USD 61.9/MT FoB, Paradip Port. The vessel is expected to reach China’s Taicang Port.

Indian pellet exports are gearing up

Recently, Indian pellet exporters have become active in pellet exports. Few major Indian pellet exporters are found concluding deals with China. As we have reported earlier, JSPL and Odisha-based pellet maker BRPL are aggressively focusing on pellet exports to China.

Jindal Steel & Power has lined up 5-7 shipments to China for June and July’16 deliveries.
On similar lines, BRPL is also expected to export around 55,000 MT pellets to China from Paradip Port.The vessel is expected to arrive at berth on 17 Jun’16. The deal has been tentatively concluded at USD 66-68/MT, CFR China.

China – a potential market for Indian pellet exports

Due to disruption of Samarco’s operations which supplies around 10-11 MnT pellet to China, the country has a shortfall of pellets to run their steel industry. However, exporting pellets from India is somewhat feasible for China due to less transition time.

Also, pellet demand in India is low since the starting of this month owing to dull market sentiments.

Indian pellet exporters are receiving inquiries regarding pellet exports. Favorable global market conditions, as well as a sudden surge in iron ore prices, are making pellet exports viable to China.

Since, Essar Steel exports all of its material from its plants located near major ports, namely Paradip and Vizag. The transportation cost from these plants to ports remains less as it is mainly done via conveyor belts.