India: Essar Steel likely to start Pellet Production in Aug’14

• Essar Steel to start commercial production of 6 MnT Pellet plant at Paradip (Odisha) in August, 2014
• Essar will be the largest Pellet producer with an annual capacity of 14 MnT
• Merchant availability of Pellets will increase
• Imports should come down

Essar Steel, which successfully commissioned 6 MnT pa Pellet plant in Odisha that forms Phase 1 of its planned 12 MnT pa, may start its commercial production by Aug’14, according to sources.

The Paradip plant was set up to feed raw material need to Essar’s 10 MnT pa steel making facility at Hazira, near Surat in Gujarat. The company has an existing capacity of 8 MnT pa Pellet plant at Vizag in Andhra Pradesh.

However, the Odisha unit has been running at less than its designed capacity for a year because of non-completion of its pipeline project, which was to carry Iron ore fines from Keonjhar to Paradip. Company has recently finished its 254 km slurry pipeline from Dabuna in Nayagarh district to Paradip and is under trial run.

Essar will be the largest Pellet producer in the country with an installed capacity of 14 MnT pa.

Imports may come down on increasing Merchant Availability of Pellets

Essar’s Odisha plant will give some relief to Indian steelmakers, who have been importing Iron ore after the Supreme Court’s directive of suspending mines running under second deemed renewal in Odisha. Indian Iron ore imports touched 1.3 MnT in FY15 (till July).

Also, with easy accessibility to Paradip port, Essar Steel will have an advantage over imported Iron ore. Recently, the company has shipped a cargo of around 42,000 MT from Paradip port to Kandla, which will be used for merchant sales.

Expected Pellet Plants in FY15