Indian Iron pellet prices which are hovering at same levels from last 2-3 weeks may see some correction in Apr’14. Speaking to trade sources SteelMint assessed that the key factors that will put prices under pressure are:
1. Increase availability of Iron Ore from Odisha
Fresh supplies of Iron ore coming from Odisha will play a crucial role in the month of April. Sources mention that most of the mines have either exhausted their production limit or outside state sales quota (according to 50:50 rule in Odisha). Experts commented that with improved supply of Iron ore, prices are expected to correct along with Pellet prices.
2. Increase Import of Scrap
Import of Scrap which had been quiet for last 6-month has started picking up with global Scrap offers falling upto USD 20/MT and Indian currency reviving back to 60-61 levels per USD. Imports which had touched an all time high of around 0.6 MnT per month have fallen to 0.25 MnT per month recently.
3. Fall in Export of Iron Pellets
Iron pellets export from Indian has been negligible in Feb’14 primarily due to falling spot prices in China along with 2.5% export duty on Pellets. Falling exports will increase supply in domestic market and keep prices under pressure.
Overall, market carries a bearish sentiment for Iron ore lumps and Pellet prices in coming month, however with the Supreme Court’s verdict on the Shah Commission report will set a direction for the industry.
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