Hike in imported lump offers over an increase in global iron ore prices has resulted West India (Gujarat) based steel mills to explore other options.
SteelMint has learned from the market sources that western India based steel mills have booked pellet from central India based pellet makers. As per the sources, they are moving pellet (Fe 63%) from plants via Dhamra port to Kandla. According to the sources landed cost will be around INR 8,000-8,100/MT.
Gujarat based steel mills have booked around 53,860 MT pellets from Iran is expected to arrive at Kandla port shortly. Since the data maintained with SteelMint, it’s for the first time that India is importing pellets from Iran. As per sources, the pellets are of Fe 65% grade and the landed cost is around INR 8,600-8,800/MT.
SteelMint conversation with the traders learned that, due to lower pellet prices in the global market, pellet becomes the cheaper substitute for the western India steel mills compared to South African lumps. Current pellet premium price is USD 29.1/MT against USD 29.35/MT a week ago. SteelMint’s South African lump assessment stands at USD 125/MT, CFR India.
Bhilwara (Rajasthan) based pellet maker – Jindal SAW has kept pellet offers unchanged at the beginning of this week at INR 8,500/MT delivered Kandla for Fe 63% grade pellets.
Competitive offers from central India delivered to western India (Gujarat) may keep western India pellet prices under pressure.
Apart from this, Gujarat based steel mills also source iron ore from Karnataka e-auctions as per their requirement.
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