Imposition of 5 percent duty on exports of Iron Pellets receive a highly negative response from Pellet Manufacturers

Bhubaneswar: The imposition of export tax on iron ore pellets by the government of India has come in such a time when the global market of the steel making commodity is going through a bearish trend. After crossing USD 155/MT (FOB, India Main Port) in the month of December 2013, the prices has witnessed a sharp fall to about USD 142/MT currently. In these circumstances imposition of export duty will put further pressure on the margins of pellet makers.

“The  imposition of the duty will even hurt more to Indian manufacturers as Pellet prices in global markets have come down to USD 142/MT at Indian ports from USD 155/MT in November last year” said Mr N.D.Rao, Managing Director, Brahmani River Pellets Ltd (BRPL), a majority owned Stemcor project, comprises a 4 MnT pa pellet plant in Odisha.

He further added that “imposition of 5% export duty is a setback for Indian pellet industry, because as manufacturer of Iron Pellets, we have to pay excise duty and this export duty has come as an additional burden.”

On the other hand, the Pellet Manufacturers Association of India (PMAI) secretary S. K. Chaterjee has said imposition of export duty is a retrograde step and will have far reaching implications on the industry, which is already paying three times railway freight. He said that the export of pellets has not been hurting the domestic steel industry as the current export of pellets is just over 1 million tones and is only 1.2% of the installed capacity.

Currently India’s installed pellet making capacity has increased to 60 MnT with several miners in the state of Odisha have set up plants and some others have plans to set up such plants.