KIOCL (formerly Kudremukh Iron Ore Company Limited) has opened its domestic Iron Pellet prices for August’13 at Rs 7,300/MT (ex works Mangalore). Prices did not increase owing to the low demand for Pellets during the last month. Further decrease in prices in order to get rid of stock might result in closure of operations due to high cost of production, coupled with low buying interest and rising inventory levels.
A Pellet manufacturer from Eastern Coast of India is offering the material at Rs 6,300/MT (Basic) to its buyers based at Western Coast of India i.e. Gandhidham (Gujarat); landed cost of the material stands at Rs 7,500/MT.
The current market situation in terms of poor demand is unlikely to improve unless there is some upward movement in finished steel prices.
KIOCL Ltd, a wholly owned Government of India Enterprise, was established in 1976 to develop the mine and plant facilities to produce 7.5 million tons (MnT) of concentrate per year. They operate Iron Oxide Pellet Plant at Mangalore (Karnataka). A Pelletisation plant with a capacity of 3 million tonnes per year was commissioned in 1987 for production of high quality blast furnace and direct reduction grade Pellets for export. Legend and wild beauty, Kudremukh, in the State of Karnataka, is known to have one of the largest deposits of iron ore in the world.
Meanwhile, depreciating rupee value in the global market against US dollar have brought a drastic decline in Pellet imports in the western region of the country in the past one month.