India: Jindal SAW Increases Pellet Offers On Rising Imported Lump Prices

Rajasthan based pellet maker – Jindal SAW has raised pellet offers following hike in prices of South African imported lump. Pellet offers for Fe 63% grade pellets have moved up by INR 300/MT W-o-W from previous week’s assessment of INR 5,150/MT (delivered Kandla) to today’s assessment of INR 5,450/MT (delivered Kandla).

South African lump offers to India are witnessing upward movement amid hike in spot lump premium. Spot lump premium is currently assesed at USD 0.196/DMT CFR China against USD 0.098/DMT, CFR China a month back.

Also iron ore prices in China increased today and the index for Fe 62% fines is approaching USD 60/MT, CFR China mark. Thus all these factors have resulted in increase in offers of imported lump to India.

It is to be noted that Gujarat based steel mills majorly use either domestic pellets or imported lumps from South Africa. Few Gujarat based steel mills also procure iron ore from NMDC (Chhattisgarh), Karnataka e-auctions, Odisha mines and from Madhya Pradesh.

Pellet Market Updates from other regions

West Bengal based pellet makers raised offers by INR 150/MT W-o-W and presently heard in the range of INR 4,400-4,600/MT (Excise duty & VAT/CST extra) for Fe 63% grade pellets. Offers have moved up over improved realizations in export although trades at these prices have still not been heard.

Central India (Raipur) pellet offers have also moved up by INR 100/MT and are currently seen at INR 4,800-4,850/MT (Excise duty & VAT/CST extra) for Fe 63% grade pellets. Improved demand from sponge manufacturers has resulted in price hike.

Indian Pellet Reference Prices as on 27 Jun’17

*loaded to wagons
**delivered
Prices (Excise Duty, VAT/CST extra) mentioned are for min 1000 MT qty booking on advance payment basis
Source: SteelMint Research