India Steel Market Watch
September 28: Indian iron ore pellet-makers struggling to keep operations afloat in the domestic market are banking on government support in the form of a cut in the export duty and railway freight cost to make exports viable.
“Pellet makers have to be from the country since pellets cannot compete with iron ore lumps. The Government of India needs to fine-tune its policies for exports by removing the export duty and reducing railway freight for pellet transport. Today, only shore-based pellet makers like KIOCL and Essar Steel are finding exports viable due to logistics advantage,” said an official from the Pellet Manufacturers’ Association of India.
He suggested the introduction of a safeguard duty for pellet makers along the lines of the one for steel-makers to counter the upsurge of imports from China.
PMAI had earlier moved the finance ministry to remove the 5% export duty and, instead, impose a levy of at least 15% import duty on iron ore lumps.
Pellet prices were ruling at Rs 4,700 –4,900 a ton compared to lumpy ore available in the range of Rs 3,000 –3,500 per ton. Cheaper imports of pellets from China in the price band of Rs 4,000 –4,500 a ton have compounded the woes of pellet manufacturers.
Against the nationwide installed capacity of 83 million ton per annum, pellet manufacturers were operating at barely 30-35% of their rated capacity.