Iron pellet prices hit an all time low in Odisha as the manufacturers have pulled down their offers for the week ended July 22, 2013. The offer price for the material is at Rs 6,100/MT including loaded to truck at Barbil in Odisha.
Finished steel prices are declining with time owing to which the Pellet prices are also fluctuating. The situation might improve by the month of August, 2013, but there is no chance of even a slight improvement in the month of July, 2013.
Construction activities have still not started yet because there are no new projects. The government projects are being delayed and the private sectors are also not investing into any new projects.
According to the manufacturers there is very less demand for pellet in the market resulting in negligible cash flow along with decreased margins.
Jindal Steel & Power Limited (JSPL) has kept pellet prices at Rs 6,500/MT since the beginning of July. They will now begin to maintain the offers at various levels in order to alleviate the market condition. JSPL is using Iron pellets in its plants such as Jindal Shaded Iron & Steel located in Oman and also in its plants situated in Odisha.
Keonjhar located pellet plant has decided to stop taking booking orders till 10th August, 2013. They are already occupied with previously booked orders at Rs 6,200/MT which needs to be fulfilled by mid-August. Now, if they take orders, they will have to give offers at a lower price, so they are avoiding any further bookings to evade loss.