India’s KIOCL plans higher iron ore pellet output

28-Jan-2019

India’s state-controlled KIOCL plans to increase iron ore pellet output in the 2019-20 financial year that starts 1 April, despite a downturn in export prices.

KIOCL plans to produce over 3mn t of iron ore pellet in 2019-20, up by 20pc from estimated output of 2.5mn t in 2018-19. “Some plant shutdowns had affected output in 2018-19, which is unlikely to recur in the next fiscal,” KIOCL chairman MV Subbarao said on the sidelines of the India Steel 2019 conference in Mumbai.

KIOCL currently prices its 64pc, low-alumina pellet at $109-110/dry metric tonne (dmt) fob New Mangalore port, down from a high of $150-160/dmt in September and October last year. “Demand is quite stable and these prices are still viable for exports,” Subbarao said.

China is the largest buyer of Indian pellet, with most sales taking place in the spot seaborne market. Demand has slumped since November as lower profit margins prompt mills to cut back on higher-priced direct charge material in the furnace burden.

KIOCL exports around 80pc of its production, selling the rest in the domestic market where prices are around $120/dmt.

India’s largest pellet producer private-sector Essar Steel is continuing to export at around 100,000 t/month despite the lower prices, the company’s marketing director Vikram Amin said.

Source: ARGUS MEDIA