Indian Pellet Prices under pressure on Low Demand

Indian Pellet prices have yet again come under pressure owing to increased supply of Pellets and low demand from Sponge iron units. Most of the manufacturers have reduced their prices by INR 200/MT (officially/unofficially).

A Sponge iron manufacturer reported to have offers from Odisha based manufacturers in the range of INR 7,000-7,200/MT for Fe 63%.

Factors putting pressure on Pellet Prices

1. Resumption of Tata Steel (Odisha & Jharkhand) Mines in Dec’14: Tata Steel is consistently sourcing over 100,000 MT Pellets from merchant manufacturers like JSPL and BRPL in last few months. Resumption of its mines means dependency on Iron ore/Pellet from merchant market will come down.

2. Serajuddin Mines EC extended: Sirajuddin Mines is granted with extended Environmental Clearance (EC) of 15.15 MnT, which will certainly increase supply of lump and fines in the domestic market.

3. Rising Imports: Lot of imported Iron ore cargoes were booked in the month of November and December for which delivery is expected in Jan’15.

Trade-wise

1. Barbil based manufacturers are offering Fe 63% Pellets at around INR 6,900-7,100/MT based on quantity
2. JSPL & BRPL prefers to close their sales but likely to offer in the month of Jan’15
3. Jharsugda based manufacturers are offering Fe 63% Pellets at around INR 7,100/MT
4. Pellets prices in Raipur are assessed at INR 7,400-7,500/MT
5. Imported Iron ore lump of Fe 64% from South Africa is assessed at USD 93-98/MT, CIF India
6. Serajuddin Mines offer 5-18 mm (Fe 63%) ore at INR 5,700/MT ex-mines (including Royalty)
7. Essar Steels has exported about 150,000 MT DR grade (66%+) Pellet to Iran at around USD 145/MT, FoB Vizag Port

Indian Iron Pellet Prices

All prices are basic with Excise & VAT extra
*as per loaded to Wagons
Source: SteelMint Research