Bahrain Steel (formerly, known as GIIC), having an installed capacity of 11 MnT pa in Arabian Gulf, told SteelMint about improving Pellet demand in international market and drastic drop in buying volumes from India.
The exporter made their last shipment to India in December, 2013 to a steelmaker based in Gandhidham (Gujarat). 55,000 MT of Fe 66.5 DR grade Pellets was shipped at USD 178-180/MT CFR Kandla; time of delivery is 5 days.
Current price of Fe 65 DR Pellets is hovering at around USD177/MT CFR and BF grade at around USD 170/MT CFR in international market. 63.5/63 Spot Iron ore fines in China is at USD 125/MT CFR China.
“We are exporting about 80% of Pellets to Gulf; the rest 20% to India, SE Asia & Far East Asia. Earlier, about 44% of the material was sold to India & Gulf each. Bahrain steel imports Iron ore from Brazil, Europe and Italy.
Demand from Indian steel makers has come down drastically because of increase in domestic supply, widening difference in landed cost from domestic and international market and weak Rupee against USD. They have preferred to take Pellets from KIOCL and Jindal Saw; requirement of high quality Pellets pushes them for imports”, a senior official at Bahrain Steel said.
On What Grounds has overseas Demand improved?
- In US, new DR plants are coming up because of discovery of Shale gas
- Middle East steel demand has improved. But there is a good and great shortage of lumps, which is of poor quality too
- Europe is using more lumps now instead of Sinter, in order to protect environment
Slow Down in Trades from Others
- Perwaja Steel, Malaysia largest steel producer is undergoing financial restructuring
- Indonesia is fighting against issues around taxes for oil & natural gas projects
- Iran was buying through Dubai based traders but close down of DRI plants have resulted in falling demand
- Unstable conditions in Iraq last month has offset Pellets buying
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