Currently, Iron ore pellet exports is gaining momentum. Indian iron ore pellet exporters have become active. With abolition of export duty on iron ore pellets and favorable global market conditions, viability of pellet export increases, supporting Indian pellet exports to gear up.
Two exports shipments namely of KIOCL and the well known Brahmani River Pellets are in pipeline as of now.
State owned KIOCL, the major exporter of high grade pellets have recently floated a limited tender for export of pellets during Apr’16. Its been long time, the company had floated this tender for their empanelled customers. Date of booking will be from 29th Mar’16 and 31st Mar’16.
Well known Odisha based pellet maker BRPL, is all set to export its first shipment of the fiscal, around 48,000 MT pellets to China. The pellet maker has a pellet capacity of 4 MnT pa. Market sources shared that the deal was concluded at USD 61/MT, FoB Paradip Port. The vessel freight to China is around USD 5-6/MT.
Let’s see why Indian pellet exporters are turning active?
1.Abolition of pellet export duty
Being concerned about the Indian pellet industry, Indian government took a corrective measure to abolish 5% pellet export duty on 04 Jan’16. This was in regards to move Indian pellet exports.
2. Global pellet index further increases
With the increase in pellet price index, viability for Indian pellet exports moves up significantly.Pellet prices for Fe 65% BF grade pellets have moved up sharply by USD 20/MT since Jan’16. Currently, pellet prices are at USD 75.4/MT, CFR China.
3. Increase in global pellet premium
Global pellet premium index continuously increases. Pellet premium for Fe 65% BF grade pellets has moved up to USD 16.5/DMT, CFR China against its previous assessment of USD 16/DMT, CFR China. As per reports, few global end users have shifted their interest towards pellet usage looking at its cost effectiveness against iron ore lump. This in return, increases demand for Indian pellets in global market and hence, pellet export will further gain.
By Feb’16, Indian pellet exports in this fiscal have summed up to 0.78 MnT. Out of which Essar Steel exported 0.61 MnT and KIOCL exported 0.17 MnT. With the measures taken by Indian govt. inorder to boost exports as well as supportive global sentiments will likely to boost pellet exports in the coming fiscal.
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