JSPL strikes pellet export deal with UK firm at $149 a tonne

Deal was signed last month for $149 a tonne, cost, freight to UK

Jindal Steel and Power Ltd (JSPL) has sent a shipment of 50,000 tonne iron ore pellets to a United Kingdom-based firm from Paradip port.

The deal was signed last month for $149 a tonne, cost and freight to UK. It was the first export delivery of the company this year.

JSPL has a 4.5 million tonne per annum iron ore pelletisation plant at Barbil in Keonjhar district, which has been operating since 2011.

The company is also setting up a six million tonne steel plant near Angul in Odisha. It recently achieved 2.5 million tonne per annum (MTPA) steel-making capacity in the first phase with the commissioning its steel melting shop (SMS).

“The ship with the consignment of pellets left Paradip late Tuesday evening. JSPL has another delivery in waiting for similar quantity of iron ore pellets,” said a trade source.

This is not the first time that a pellet export delivery took place from Paradip in 2013. Essar Steel, which has a six million tonne a year pellet plant at Paradip, has made four export deliveries each measuring 50,000 tonne this year.

Pellets are made by moulding powdery iron ore fines into desired configurations, with some value addition. The export of the commodity is gaining momentum from this east coast port taking advantage of availability of large stocks iron ore fines. As per a trade estimate, Odisha has about 60 million tonne fines stacked at various private and state-owned iron mines.

“Another reason for rising pellet exports is that currently it attracts no export duty unlike iron ore,” the source said.

To ensure better availability of iron ore for domestic steel units, the Union government has imposed 30 per cent export duty on iron ore lumps and fines. But export duty on iron ore pellets was withdrawn in the 2011-12 budget. Earlier, the government was collecting export duty on pellets at the rate of 15 per cent.