State-owned KIOCL and 100% export oriented unit (EoU) is to export iron pellets to China. This is company’s first pellet export shipment in FY17. KIOCL exported 105,000 MT pellets to China in FY16.
A vessel named “ Calimero” carrying 55,000 MT high-grade pellets is expected to reach Mangalore Port by the end of this week. KIOCL is currently operating 3.5 MnT pa pellet plant in Mangalore.
If we talk about global prices, around 2 weeks ago, global pellet prices for (Fe 64/63%) were hovering in the range of USD 83-85/MT, CFR China, and the deal may have also concluded within the same range.
As per market sources, as global market is on a higher node and upcoming demand of pellets in China due to lesser use of sinter upon environmental causes, utilization of iron ore lumps and pellet will gradually increase by Chinese steel mills using blast furnaces to produce steel. Hence, China being a potential market, Indian pellet exports to China will gradually increase in the coming time.
Apparently, China is shortfall of pellet due to Samarco dam destruction from Nov’15, which supplied over 10-11 MnT DR grade pellets to China, pellet imports will increase from India. On the other hand, Indian government measure to paced off pellet export duty to nill in FY16 will help to boost pellet exports. Also, due to fewer freight transitions, pellets imports from India to China is much feasible.
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