Indian Pellet Prices Constant despite fall in Sponge Iron Prices

Indian Pellet manufacturers have maintained offers for the previous couple of weeks despite of softening Sponge iron prices by upto INR 300/MT.

Pellet (Fe 63%) offers are quoted at INR 8,000-8,800/MT in eastern/central India and at around INR 7,200-8,000/MT in western/southern region (ex-works prices). Pellet prices in Karnataka have corrected by around INR 150/MT because of low demand for finished goods and falling prices of semi finish.

Sponge iron plants in eastern region have either closed down or are utilizing least workable capacity over high Pellet prices and scarcity of Iron ore. Resumption of mining operations of merchant Iron ore mines in Odisha and Jharkhand that had been asked to stop mining has seen no development yet.

Shortfall of Iron ore in the domestic market has restricted Pellet prices to fall from current level despite weakening Sponge iron prices. Declining Iron ore prices in the global market have not shown a significant impact on Indian market as Iron ore are being imported by JSW Steel and Tata Steel and not by mid-sized steel mills.

Sources mentioned that Kamachi Steel is offering 120,000 MT of South African Kumba Iron ore lump (Fe 64%) on FLC/HSS basis. Prices of this material to be delivered in December at Krishnapatnam port are quoted at USD 104/MT CFR.

Brazil based Vale is offering Fe 65% Pellets at USD 115/MT CFR India for November (1st half) delivery. While, South African Kumba Iron ore lump (Fe 64%) is being offered at USD 100-102/MT CFR India for delivery during the end of next month.

Pellet offers from Bhilwara (Rajasthan) based Jindal Saw is quite competitive at INR 7,200/MT (landed at Kandla) in contrast to imported Pellet offers.

Indian Iron Pellet Prices

Basic prices
*loaded into wagons
** delivered, excise duty & CST extra
Source: SteelMint Research