India: KIOCL Signs MoU for Pellet Supply to European Markets

India’s state-owned pellet maker - Kudremukh Iron Ore Company Ltd (KIOCL) has signed MoU on 26th Jun’19 at METEC- 2019 at Dusseldorf, Germany with Glencore international AG and Steel Mont GMBH for the sale of pellets in European market including UK.

This is the second MOU company has signed in last three months for the sale of high-grade pellet and it seems that they are continuously exploring non-Chinese markets.

Towards the the end of Apr’19, KIOCL had signed a tripartite MoU with Emirates Steel, Abu Dhabi, and Star Global, Dubai for sale of high-grade pellets to Emirates Steel.

The company has taken up many initiatives like multiple sourcing of raw materials, effective utilization of coastal transportation, and indigenization of various raw materials, proper inventory management system, and stringent austerity measures, etc in its plant.

Indian mills aiming to produce high-grade Grade pellets to offset Vale shortfall-: India pellet makers are actively exploring the non-Chinese market to exports. Demand seems to be robust from Europe, Japan, Korea, and MENA regions. They are looking to decrease the dependency on the China market.

Vale’s pellets production was impacted by 11 MnT pa, as a result of the stoppage of the Fábrica and Vargem Grande pelletizing plants.Filling up the gap of DR grade pellets supply is a matter of concern especially for DRI producers.

KIOCL targets 2.6 MnT pellet output for FY'20-: KIOCL is working to increase its pellet production by 20% in FY20 at Mangaluru plant, which has an installed capacity of 3.5 MnT. With an aim to get the benefits of low logistic cost, KIOCL is planning to focus on coastal markets of Visakhapatnam and Gujarat. Company was allocated around INR 200 crore to modernizing Mangaluru based pellet plant for upgrading its existing technology and logistics system.

According to SteelMint Stats, KIOCL remained India’s 3rd largest pellet exporter in FY19 with export volume of 1.57 MnT. India exported a total of 9.3 MnT pellets in last fiscal.