Pellet offers firmed up after government announced abolition of 5% export duty on export of iron ore pellets following a long demand by pellet makers in India, sources informed ISMW.
Current offers for Fe 62%-63% ranged from Rs 3,300-4,400 ex-works in the markets of Barbil, Tatanagar and Bellary.
Imported pellet offers from China (5-18 mm) of 63-64 grade Fe, however, rose $2 per ton to $59 per ton while export offers rose $2 per ton to $46 per ton.
It is expected that with the removal of the export duty, Indian pellets will become more competitive in the global market.
In 2014, the government had imposed a 5% export duty on iron ore pellets.
Narendra Singh Tomar, Mines and Steel Minister, said, “The move would improve capacity utilization of pellet plants and give a necessary boost to the sector."
Deepak Bhatnagar, Secretary General, Pellet Manufacturers Association of India (PMAI), said the industry has been asking for withdrawal of the export duty since it was introduced in 2014.
During this period the capacity utilization of the pellet industry came down to 35%, he said.
Bhatnagar said when the export duty was levied, the price of pellet was around $130 per ton and now it has come down to $59 per ton. As a result exports became non-viable. Bhatnagar further added that the government need to levy an import duty of 30% on lumps and pellets to restrict the imports.
Following are pellet prices in different markets:
Size (mm) |
Grade % Fe |
Jan 7, 2016: Price (Rs per ton) |
Jan 6, 2016: Price (Rs per ton) |
Jan 5, 2016: Price (Rs per ton) |
|
Bellary |
5mm-18mm |
62 |
4400 |
4300 |
4300 |
Tatanagar |
5mm-18mm |
63 |
4100 |
4100 |
4100 |
Barbil |
5mm-18mm |
63 |
3300 |
3100 |
3100 |
China imported pellets |
5mm-18mm |
63-64 |
$59 |
$57 |
$57 |
India export |
6-20mm |
|
$46 |
$44 |
$44 |
Product |
|
Iron Ore Pellet |
Grade |
|
5-20mm, Fe 63-64 |
Location |
|
FOR, Barbil |
Basis |
|
Basic |
Month/Unit |
Week |
Rs/ton |
Oct-15 |
1 |
4100 |
|
2 |
4100 |
|
3 |
3800 |
Nov-15 |
1 |
3700 |
|
2 |
3500 |
|
3 |
3500 |
|
4 |
3200 |
Dec-15 |
1 |
3100 |
|
2 |
3100 |
|
3 |
3100 |
|
4 |
3100 |
Jan-16 |
1 |
3300 |
Source: India Steel Market Watch