KIOCL Tender Pushes Indian Pellet Export Prices Up

Demand for Indian pellets has witnessed improvement this week. Southern India based pellet maker - KIOCL has concluded pellet export deal recently.

The company had floated export tender offering 50,000 MT pellet consisting of Fe 64% content with 1.4% Al. The tender was due on 09th Apr'19. As per the sources, the deal has been concluded at around USD 114/MT, FoB India.

It is to be noted that high grade pellets (less than 2% Al) fetches premium by USD 5-7/MT over the regular grade pellets (3% Al). SteelMint's assessment for regular grade pellets stands at USD 107/MT, FoB. Thus the recent tender has pushed up prices by USD 3-4/MT.

Last month the miner conducted two export deals of 50,000 MT each consisting of Fe 64% content and less than 2% alumina at around USD 116.5/MT, FoB India.

KIOCL is working to increase its pellet production by 20% in FY20 at Mangaluru plant, which has an installed capacity of 3.5 MnT. KIOCL recorded enhanced pellet production for FY'19. The production recorded at 2.24 MnT, above the set target of 2.17 MnT. However, the production marked 4% drop Y-o-Y as against FY’18 production at 2.33 MnT amidst 30-day operation halt owing to material shortage.

Indian pellet export volumes have dropped slightly on yearly basis. Pellet export volumes were registered at 9.22 MnT in FY'19 against 8.96 MnT in FY'18. KIOCL exported 1.52 MnT, down 4% against 1.59 MnT in FY18.

Demand for Indian Pellet Increases on Fresh Chinese Buying

Indian pellet exports which were subdued for last few weeks have gained momentum. Four parcels have been heard concluded this week and few more parcels are under negotiation on fresh buying from Chinese market. Prices are reported in the range of USD 116-117/t CFR for regular grade ( Al 3%) which is equivalent to USD 106-107/ FOB India.

Yesterday SteelMint reported, eastern India based pellet maker - Brahmani River Pellets concluded 60,000 MT pellet (Fe 64%, 3% Al) at USD 117/MT, CFR China which is equivalent to USD 107/MT, FoB India.

Earlier this week, Godawari Power & Ispat concluded two export deals of 50,000 MT each for April loading.The deals concluded were around USD 106/MT, FoB India