Indian pellet export shipments were recorded at 13.85 mn t in FY’21, as per data maintained with SteelMint. The exports picked up by 9% y-o-y as against 12.67 mn t in FY’20.
Factors driving Indian pellet exports-
- Pellet export prices hit record high:SteelMint’s pellet export index (FOB east coast India) witnessed a rise from yearly average of $105/t in FY’20 to $135/t in FY’21. Indian pellet export prices were trading at an all-time high at $196/t in Jan’21 on falling port inventories in China and robust demand, as per the data maintained with SteelMint since CY’12.
- Production curbs enhanced demand for high grade ore:Tangshan Government in North China’s Hebei had suspended the operations of the local re-rollers since Jan’31 to improve the air quality. Later, during the third week of Feb’21, additional restrictions were put on due to poor air quality forecast.Recently, four steel mills in Tangshan have been downgraded to grade D. Curbs were also imposed on 23 steelmakers from March 20 to Mar 31 in a bid to lower emissions by 30%-50%.Sintering activities were limited, which resulted in increased demand for high grade raw material including pellets.
- Limited domestic offtake during lockdown:Indian pellet export shipments hit an all-time high of 2.1 mn t in May’20 when steel mills were running on low capacity utilization due to lock-down in Apr’20 and early May’20, pellet offtake in the domestic market remained slow
- Material availability crisis:Seasonal factors like rainfall and unfavourable weather conditions in Brazil favoured Indian exports of pellets.
Indian pellet exports to China up by 7% y-o-y
China was the largest importer of Indian pellets in FY21 at 11.04 mn t, up 7% as against 10.35 mn t in FY’20. Malaysia stood second largest exporter at 0.80 mn t followed by Oman at 0.66 mn t.
Company-wise Indian pellet export shipments
BRPL was the largest pellet exporter in FY’21 at 2.89 mn t, down against 2.99 mn t in FY’20. JSPL stood second largest exporter at 2.24 mn t followed by KIOCL at 1.77 mn t.
Qty in mn t, Provisional data,
Source: SteelMint Research, Customs
Paradip port accounted for 41% of the total export
In FY’21, exports from Paradip port stood at 5.71 mn t, against 4.34 mn t in FY’20. Dhamra port stood second at 3.57 mn t and Mangalore port was third at 1.77 mn t.
Vale has started the commissioning process to ramp up production at few of its mines which remained closed post the Jan 2019 dam disaster. The resumption in Brazilian pellet capacity is likely to affect Indian pellet exports. However, the rising production curbs may inhibit pellet exports. Also,Samarco, a 50-50 joint venture between BHP and Vale, has recommenced iron ore pellet production in Dec ’20. The company expects to produce between 1-2 mn t iron ore pellets in the ongoing fiscal and once ramped up, it expects to achieve the production capacity of 8 mn t pa. It would be interesting to see how increasing global supplies impact the Indian pellet export market in FY’22.
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