KIOCL is offering Pellets at INR 8,000/MT (ex works Mangalore) for the month of November. Prices have moved up by INR 250/MT in comparison to October, owing to expensive raw material and rise in freight rates.
Hike in Sea freight charges by USD 3-4/MT as compared to the previous month because of congestion at Paradip Port (a number of vessels are held up) and limited availability of vessels presently, have pushed up Pellet offers.
Also, NMDC had raised Iron ore fines prices by INR 100/MT to INR 2,610/MT (basic & excluding 10% royalty) for October, which remained unaltered for November.
KIOCL is keen to export its material looking at improving demand and price levels in international market, limited domestic demand and weakening INR levels against USD. Domestic demand is decent and has not been very encouraging because of low requirement from Sponge iron units, which are running at limited capacity utilization.
Lifting of minerals by trucks to Paradip Port have been restricted till 17 November, 2013 by Odisha government, looking at traffic congestion. This might have some impact on timely shipment of Pellets from the Port.
Pellet Offers sustain at Previous Levels in Bellary (Karnataka)
Bellary (Karnataka) based Pellet manufacturers are offering Fe 62 & 63 grade Pellets at INR 6,800-7,200/MT (ex works). Demand from Sponge iron plants has picked up on anticipations of price rise in near future, as Scrap offers have moved up because of shortage.
According to a senior official at one of the Pellet plants in Bellary (Karnataka), “there are rumors that government (CEC) might allow exports of Pellet from Karnataka in near future.
Sponge iron industry has dried down and the same might happen with the existing Pellet plants, provided exports market are closed for us. Realizations from exports market is higher as prices have firmed up and Indian currency has depreciated against US Dollar
Pellet plants are running at only 60-70% capacity utilization and we are unable to raise the levels to 80-90% as demand in domestic market is limited and rise in production levels will impact our input cost”.
Current Pellet offers across Indian market:
Barbil: 7,100
Keonjhar: 7,000
*Jajpur: 7,250
Raipur: 8,200
Bellary : 6,950-7,200
(Fe 62): 6,800
Tatanagar: 7,300
Mangalore: 8,000
Basic Prices in INR/MT (Fe 63), *Loaded to wagons
India (Export): 147 FoB
China (Import): 165-170 CFR
(in USD/MT)
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