Federation of Indian Mineral Industries has urged the Ministry of Mines for a complete ban on pellet exports as the domestic steel industry is facing a shortage of raw material amid the COVID-19 pandemic. On the contrary, pellet manufacturers association are against the ban, especially when domestic demand has dried up following the pandemic.
Pellet exports have increased over the last few years hurting the domestic steel industry. It is utmost necessary to fulfil the domestic requirement first and ensure the availability of high-grade material for the domestic market, according to FIMI.
In fiscal 2019-20, Brahmani River Pellets (BRPL) exported around 2.91mn mt of pellet, state-owned KIOCL exported 1.95mn mt and JSPL has exported around 2.07mn mt pellets.
Pellet industry generates a lot of jobs and converts fines into usable products, but it is still ignored by the Steel Ministry, complained a pellet manufacturer based in South India. Due to liquidity crunch and the upcoming monsoon season, many pellet manufacturers have already or are in the process of shifting from iron ore to iron pellet for their manufacturing process. Pellet makers are hopeful that demand will improve in the domestic market but exports give better margins compared to the domestic market.
There is also a shortage of high-grade pellet in the domestic market because iron ore imports are not viable for some steel plants based in Tamil Nadu and Gujarat.
Presently, Indian iron ore pellet price remains at around $91/mt fob India since the starting of the month.