In Jan 2014, Iron Pellet manufacturers located in the state of Karnataka have raised prices for the second time. Iron ore shortfall in contrast to high demand has pushed up prices and ultimately forced Pellet producers to offer expensive material.
Pellet makers are charging INR 7,750-8,000/MT (ex works) for Fe 62 material and INR 7,200-7,250/MT for Fe 60. Prices have moved up by INR 100-350/MT in last one week. With no option left, they are forced to pass on the hike to consumers over rising input cost of making Pellets and landed cost for procuring e-auction Iron ore by around INR 700-800/MT.
Fe 63 fines booking prices in Karnataka e-auction are standing at INR 3,923/MT (basic). Sponge iron prices in Bellary have also improved by INR 900/MT to INR 19,700/MT (basic) over the last one month.
[su_quote]According to Bellary based Pellet makers, “The situation might worsen further because Supreme Court has not allowed any increase in Karnataka’s Iron ore production, which is capped at 30 MnT pa. Demand is quite high and Steel mills will be unable to meet with the required quantity, Iron ore prices will continue to go up in coming e-auctions. We will follow the price hike in Iron ore to offset losses from high production cost.”[/su_quote]
Pellet prices continue to sustain in the range of INR 7,550-7,650/MT (basic) in Barbil (Odisha). Pellet export deals in the eastern coast are on hold owing to transportation issues.
Looking at decent demand, manufacturers in Raipur (Chhattisgarh) are offering Pellets in the range of INR 8,200-8,300 (basic).
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