News and Events

Indian iron ore pellet producer Godawari Power and Ispat increased sales of steel products in the April-June quarter to counter the country's steep export duties on pellets. The producer's iron ore pellet sales rose by 6pc from a year earlier but dropped by 19pc against the previous quarter to 410,667t. Output rose by 11pc against the previous year and by 8pc from January-March to 667,350t. Sales of sponge iron rose by 835pc from a year earlier and by 132pc against the previous quarter to 50,262t during April-June, while steel billets sales increased by 29pc from 2021 and by 164pc from the earlier quarter to 43,942t. MS rounds and rebar sales climbed by 22pc against the previous year and by 11pc from January-March to 36,009t. The drop in iron ore pellet sales on a quarterly basis was because the captive use of pellets in sponge iron production, the company said. There is no change to its pellet output guidance of 2.4mn t for the current 2022-23 fiscal year ending 31 March, of which 1.75mn t will be sold and about 750,000t will be used for its direct reduced iron consumption. The pellet guidance for 2021-22 was also 2.4mn t that it met. The producer's iron ore mining guidance for 2022-23 is 2.7mn-2.9mn t. It produced 2.3mn t in 2021-22 against a guidance of 3mn t. The Indian government imposed a 45pc export duty on iron ore pellets in late May that has paused shipments completely. Godawari said it had to cancel one shipment during April-June because of the export duty. As sellers have to bear the duties for any exports currently, it is planning to focus completely on the domestic market until the taxes are revoked as it is unviable to export with 45pc duty. Domestic pellet prices have fallen from an average of 12,000-14,000 rupees/t pre-export tax to Rs8,800/t currently, according to the company. Godawari said there is a surplus of pellet and steel in the domestic market compared with demand and the government should revoke the duties in due course. Changes afoot Godawari has put its steel billet plant expansion project at the Siltara plant in central India's Chhattisgarh state from 400,000 t/yr to 600,000 t/yr on hold as it works out the technology and the size of the unit. The low availability and high prices of prime-quality thermal coal has made Godawari change its charge mix from RB1 coal to RB3. It is also looking to bid for domestic coal to meet long term requirements and to shield itself against the global price fluctuations. South African RB1 coal has a net calorific value (NAR) of 6,000 kcal/kg compared with RB3's NAR of 5,500 kcal/kg. The landed cost of thermal coal in the April-June quarter was Rs17,000/t and it will be around Rs19,000/t in the second quarter, it said. The Argus 63pc Fe 3.5pc alumina pellet index average was $120.38/t last month, down by 15pc from the previous month and by 52pc against a year earlier. The 2pc alumina index average was at $127.38/t last month, down by 15pc from a month earlier and by 53pc from a year previously.