No new Iron Pellet export deal looks to be concluded anytime soon
In the last couple of weeks, no new deal for export of Pellets has been finalized and chances are quite less that one would take place in the near future.
Exporters are concentrating on fulfillment of the commitments made in the month of August and are facing low inventory for both domestic sales and export market.
Also, Pellet prices has come down by USD 5/MT to USD 160/MT CFR China in line with falling prices of Spot Iron ore (Fe 63.5/63) by USD 3/MT to USD 132-133/MT CFR China.
On FoB basis and from Indian east coast, Indian exporters are expecting offers at USD 145/MT for any forthcoming deal, looking at high domestic prices and logistics cost.
Shipments delayed for export deals finalized in August
A total of 325,000 tonnes of Fe 62.5-63.5 Pellet export deal was finalized in the month of August alone, out of which 195,000 tonnes of the material is to be shipped in the month of September.
The Paradip based exporter is not yet done with its August shipment for 50,000 tonnes and another located in Keonjhar, has chosen Haldia Port for shipment of Pellets.
It has been heard that a Barbil based manufacturer is facing issues with availability of plot and another having completed the first shipment of 50,000 tonnes, has chosen to move its material by rakes for the second shipment, with no option left.
Logistics issues hit timely delivery of Pellets from Indian east coast
In Keonjhar (Odisha), logistics issues i.e. transportation cost and availability of limited trucks has sprung up and one of the exporter has started moving Pellets from Haldia Port.
The truck freight charges have been fixed at Rs 1,900 now due to shortage of trucks and high demand.
Most of the vehicles are engaged for OMC's Gandhamardan mines Iron ore movement and other mines area.
Whereas, transportation of the material by rail will cost Rs 2,650 i.e. Rs 350 from plant to siding, Rs 2,200 railway freight and Rs 100 from siding to internal plot.
On the reasons stated above, a Keonjhar based exporter has not yet started moving Pellets for September shipment.
Paradip Port is most viable for exporting Pellets from India
Indian exporters prefer Paradip Port for shipping their raw material as movement of the material through trucks has been restricted to Vizag, Haldia and Gangavaram Port.
Freight charges for transportation of the raw material by Rail is quiet expensive at Rs 2,470 from Vizag and Gangavaram Port and at Rs 2,410 from Haldia Port.
From Haldia Port, the quantity is restricted to less than 30,000 tonnes at a time and would result in an extra cost of about USD 7-8.
Though, transporting Pellets through Dhamra Port would cost Rs 2,281 but due to some technical issues (conveyor belt) there are high possibilities of roll back of Pellets because of its spherical shape.
Now the traffic jam at Paradip Port, less availability of trucks and high charges have caused for alternative options such as rakes and other Ports.
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