Prospective pellet buyers, who are currently using lumps, will soon switch to Pellets because of quality. Jindal Steel & Power Limited (JSPL), which is one of India’s major steel producers, would be using most quantity of the Pellet produced from its new MnT plant for its DRI unit, says V.R. Sharma, Deputy MD & CEO, Steel Business, JSPL, in an interview with Steel 360.
Q. JSPL is to commission a 4.5 MnT pa Iron Pellet plant at Barbil (Odisha) by September this year. A 4.5 MnT Pellet plant is already operational at Barbil. In what ratio would the company use Pellet for merchant sales and captive consumption?
JSPL’s new DRI plant with 1.8 MnT pa capacity will also get commissioned at the same time with that of Pellet plant. These Pellets will be consumed in the DRI unit. Hence, merchant sales will remain the same for Pellet as it is now, with some marginal increase (approx 2.5 MnT pa).
Q. Supply of Pellet is increasing in the eastern region of the country. Where do you see Pellet prices heading, as presently, offers are standing at quite low levels, which was not seen any time in the last two years?
Pellets is always a superior raw material for Blast Furnaces and DRI kilns with high yield. Pellet prices are low in the present day due to weak demand. The Blast Furnace operators are still using 30-40% of Iron ore lumps. They will gradually switchover to Pellets because of high CCS, higher tumbler index, low gangue and better permeability in Blast Furnace while using Pellets. As soon as steel prices witness a rise, Pellet offers will also see an increase and the gap between Iron ore lump and Pellet prices will increase.
Q. In Indian domestic market, price gap between Pellets (including Iron ore lumps) and Iron ore fines is high, unlike international market. What are your views?
In India, Logistic cost is very high in comparison to the rest of the world. So this difference will always remain more compared to the international market. Pellets v/s high grade Iron ore 64% Fe with T-I 90+ are at the same price level. Whereas, Pellets have an added advantage.
Q. Currently, JSPL is sourcing Iron ore from its Iron ore mines as well as Sarda Mines. With rising Pellet capacity, you think the required quantity would be met or does the company have any plans to raise production from its mines?
Presently, JSPL’s Iron ore fines requirement will be met. But, later on, with the commissioning of the 3rd Blast Furnace, we will start sourcing Iron ore fines from the local miners based in the state.
Q. JSW is expected to import Pellet this financial year. According to you, is India dependent on imports of Pellet or supply from domestic producers will be sufficient to meet with the needs?
India is dependent on imports of Pellets. Production of Pellet in domestic market is low as compared to demand. India may become self reliant in Pellets by the year 2020.
Q. Lastly, Rebar manufacturers have been bullish on sales in rural market. What are JSPL’s plans for marketing its products in rural markets? How big is this market?
Considering the total number of Middle class towns and villages in the country, this niche market, when clubbed together, the quantity adds up to a huge volume. JSPL is making inroads into the rural market via its distribution and retail channels in a steady market.